united states

US Announces Anti-Avoidance Plans

Posted on June 2nd, by Global Tax Weekly in Compliance. No Comments

The US Government has unveiled more domestically-focused anti-avoidance plans, to complement its international proposals, having set out measures to close the “tax gap” in the United States – the difference between the taxes owed and actually paid.

According to Treasury analysis, the tax gap totalled nearly USD600bn in 2019 and will rise to about USD7 trillion over the course of the next decade if left unaddressed – roughly equal to 15 percent of taxes owed.

Initiatives to close the tax gap were outlined in a recent report, which revealed that as a first step, the Biden Administration had made a multi-year commitment to “rebuild the IRS” with sustained funding. In total, it has pledged USD80bn in additional resources over the next decade. Funding would go to modernizing IT systems, improving data analytics and hiring experts dedicated to complex enforcement activities.

For more information … Read More »

Growing Talk About Global Corporate Minimum Tax

Posted on May 26th, by Global Tax Weekly in Corporation Tax. No Comments

As might be expected as governments look to rebuild their COVID-buffeted economies, and to replenish their tax coffers, anti-avoidance measures are becoming the order of the day, chief among which is the proposed global minimum corporate tax rate put forward by the Biden administration.

The proposal was first discussed seriously earlier this year alongside domestic plans to increase the general and minimum tax rates (to 28 percent and 21 percent respectively), and the US authorities appear keen to press ahead in order to prevent the United States from falling out of step with the rest of the world in this regard, at a cost to its international competitiveness.

In a statement released on May 20, commenting on the progress made so far in international tax reform talks, the US Treasury announced that: “Over the last two days, leaders from the Office of … Read More »

US Treasury Lays Out Biden’s Tax Plans

Posted on April 16th, by Global Tax Weekly in Corporation Tax. No Comments

President Biden fleshed out his forthcoming tax direction for businesses, with the publication of “The Made in America Tax Plan”.

The report, released by the US Treasury, provided in-depth detail on the announcements made by Biden’s Administration at the beginning of April and the objectives behind the policies.

As well as hiking the rate of corporate tax to 28 percent from 21 percent, Biden’s Administration has announced the following changes to measures introduced by the former administration in 2017:

The rate of tax on global intangible low-taxed income (GILTI) will be doubled to 21 percent and it will be calculated on a per-country basis;
Tax on GILTI will apply from the first cent, rather than on the portion of income that exceeds a notional 10 percent rate of return on an investment in a foreign country;
The Administration has said it intends to “repeal the … Read More »

US Trade Representative Reports On Digital Services Taxes

Posted on April 1st, by Global Tax Weekly in E-commerce. No Comments

In the United States, it emerged that the US is still considering introducing taxes on six countries’ exports in response to their digital services tax regimes.

On March 26, 2021, the US Trade Representative (USTR) announced the next steps in its Section 301 investigations of digital services taxes adopted or under consideration by 10 US trading partners.

In June 2020, USTR initiated investigations into digital services taxes proposed or introduced in Austria, Brazil, the Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey, and the UK.

In January 2021, the USTR concluded that the digital services taxes adopted in Austria, India, Spain, Turkey, and the UK were discriminated against US digital companies, were inconsistent with principles of international taxation, and burdened US companies. It considered these are actionable under Section 301 of the Trade Act of 1974, which gives the USTR broad authority … Read More »

IRS Extends Reliefs For Qualified Opportunity Funds

Posted on January 28th, by Global Tax Weekly in Investment. No Comments

The IRS has been busy on the COVID front, extending reliefs available for qualified opportunity funds (QOFs), in response to the pandemic.

Opportunity zones, created by the 2017 Tax Cuts and Jobs Act, are designed to spur investment in distressed communities through tax benefits. Opportunity zones retain their designation for 10 years and investors may defer tax on almost any capital gain up to December 31, 2026, by making an appropriate investment in a zone, making an election after December 21, 2017, and meeting other requirements.

The regulations allow the deferral of all or part of a gain that is invested into a QOF that would otherwise be includible in income. The gain is deferred until the investment is sold or exchanged, or until December 31, 2026, whichever is earlier. If the investment is held for at least 10 years, investors may … Read More »

IRS Reports Released

Posted on November 25th, by Global Tax Weekly in Compliance. No Comments

The IRS’s specialist compliance teams revealed recently that they have significantly increased their focus on virtual currency tax issues during the 2020 fiscal year.

The newly published Criminal Investigation (CI) division’s annual report highlights the agency’s successes and criminal enforcement actions taken in fiscal 2020, the majority of which occurred during the COVID-19 pandemic. During the 2020 fiscal year, over USD10bn was identified as tied to tax fraud and other financial crimes, the report revealed.

The report showed that the key focuses of CI in fiscal year 2020 included COVID-19-related fraud, cybercrimes, with an emphasis on virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud, and tax-related identity theft.

In response to COVID-19 related crimes, CI special agents quickly adapted their investigative techniques to initiate cases into fraudulent claims for Economic Impact Payments, Paycheck Protection Program loans, and refundable … Read More »

Tax Reforms Expected Following Biden Election Victory

Posted on November 12th, by Global Tax Weekly in Elections. No Comments

According to announcements made during the election campaign, Biden’s tax proposals include a potential increase in the federal headline rate of corporate tax from 21 to 28 percent, reforming the GILTI rules, and introducing a 15 percent minimum tax, or “book tax,” on companies with reported income in excess of USD100m. He also discussed imposing sanctions on jurisdictions deemed to facilitate corporate tax avoidance and voiced support in July 2020 for tax relief for manufacturing companies.

In terms of personal taxes, Biden has said he would restore the top rate of personal income tax to 39.6 percent from 37 percent; restrict tax breaks for wealthy taxpayers; and tax capital gains as ordinary income and prevent wealthy taxpayers from deferring tax through investments. He also proposed that estate taxes, also reduced by the TCJA, should be raised back to “the historical norm.” … Read More »

Calls To Simplify US State Tax Rules

Posted on September 7th, by Global Tax Weekly in Compliance. No Comments

In the United States, the American Institute of CPAs and the Council on State Taxation have urged Congress to pass legislation to simplify state tax rules for remote and mobile workers.

In a joint letter to congressional leaders, dated August 27, 2020, AICPA and COST said lawmakers should focus on the Remote and Mobile Worker Relief Act of 2020, and a particular section of the American Workers, Families and Employers Assistance Act, in any final COVID-19 relief package.

Under current law, non-resident employees who visit a state for as little as 24 hours to do work can be subject to certain state income tax laws. Businesses must also comply with states’ varying withholding requirements with regards to employees who travel out of state for work purposes.

However, under the Remote and Mobile Worker Relief Act 2020, introduced in the Senate on June 18, … Read More »

Calls For Clarity On US Payroll Tax Deferral

Posted on August 26th, by Global Tax Weekly in Compliance. No Comments

In the United States, while all eyes are on the forthcoming Presidential election, behind the bluster and bombast there are attempts to keep the business of doing business running smoothly, with the US Chamber of Commerce joining calls for the Treasury Department to issue clear guidance on the recently announced payroll tax deferral.

Earlier this month, President Trump signed an executive order requiring Treasury to defer the collection and payment of employee payroll taxes for the period September 1, 2020, until December 31, 2020. The deferral is available to employees whose wages or compensation was less than USD4,000 during any bi-weekly pay period, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.

Trump signed the order, bypassing Congress, after talks between Republicans and Democrats on a new COVID-19 tax bill stalled. Trump said in comments alongside … Read More »

European Countries Propose Digital Tax Compromise

Posted on July 10th, by Global Tax Weekly in E-commerce. No Comments

The finance ministers of France, Italy, Spain, and the United Kingdom have reportedly sent a letter to the US Treasury Secretary, Steven Mnuchin, proposing that new international tax rules for digital companies could be gradually phased in.

The ministers suggest in the letter, seen by Bloomberg News, that tax rules for providers of digital services could initially be restricted to those companies providing “automated” digital services and later could be applied more widely.

By offering such a compromise, the European countries are hoping to persuade the US to re-join negotiations towards the creation of an internationally-agreed framework of tax rules for digital companies. They reportedly suggested that an agreement that includes the US could be reached by the end of 2020 if a phased approach to the introduction of these rules was on the table.

For more information on this, and other topical … Read More »


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The scheme...