China and US not among the jurisdictions that began implementing Pillar Two rules Jan. 1
- About three dozen countries and jurisdictions were said to be ready to start applying the 15% global minimum tax to big multinational companies on Jan. 1, but for now China and the United States are not among them.
- Rules creating the tax, a core component of the OECD-brokered international tax reform, call for jurisdictions to apply so-called top-up levies on multinationals that are paying less than the 15% minimum on their global income. The minimum is supposed to apply to multinationals that have at least 750 million euros ($818.8 million) in annual global revenues.
- The Organization for Economic Cooperation and Development has estimated the tax will bring in up to $200 billion dollars worldwide in new annual tax revenues from big companies, while also helping to ease tax competition between jurisdictions.
- Former OECD tax chief Pascal Saint-Amans, who led the international negotiations that led to adoption of the international tax reform, argues in a recent French-language interview that the minimum tax can work even if the United States and China don’t adopt it. (L’Opinion)
- OECD officials have said they expect Pillar 2 rules to create a “snowball effect” for adoption of the the minimum tax, because if a jurisdiction where a company has economic activity doesn’t tax the company’s income at the minimum rate, other jurisdictions can tax that income. (LegalAvocado)
"More Disputes Likely"
- Not everyone shares the OECD’s optimistic outlook for the global minimum tax. Will Morris, Washington-based global tax policy leader at PwC, said that although more countries are implementing the minimum tax and issuing guidance, their measures are “likely in different ways, leading to more disputes.” (YouTube)
- Daniel Bunn, CEO of Washington-based Tax Foundation, a research group, says many other countries beside the US and China are hesitating to implement the global minimum tax because of potential problems. He called it “at best unlikely” that the tax will raise the hundreds of billions of euros expected from it. (Euronews)
- One observer told the Financial Times the tax will be a “compliance monster for both tax administrations and multinationals.” (Financial Times)
Orrick Counts 637,000 Victims of Cyber Attack On Its Systems
- San Francisco-based Big Law firm Orrick, Herrington & Sutcliffe said the cyber attack that hit its systems in March 2023 stole sensitive health and other personal data of more than 637,000 victims. (TechCrunch)
- Senegal committed to begin automatic exchange of taxpayers’ financial account information with other jurisdictions’ tax authorities by 2025. (OECD.org)
- The Belgian tax office responsible for auditing multinationals’ transfer pricing practices recovered a record 425 million euros ($465.8 million) in 2022, according to a report. (L’Echo)
- A South Korean gaming firm says it owes about $41 million in unpaid taxes and penalty in Singapore. (CoinTelegraph)
Big Law Firms Promote Tax Lawyers to Partner, Effective Jan. 1
- Miami, Florida, headquartered Holland & Knight promoted 46 attorneys to partner across its offices effective Jan. 1, 2024, including 10 who advise on tax. (HKLaw.com)
- Akin promoted 13 lawyers to partner, including two tax lawyers in New York. (AkinGump.com)
- BakerHostetler said two tax specialists were among the 13 lawyers it promoted to partner. (BakerLaw.com)
- Clark Hill promoted 12 attorneys to member, including a tax and estate-planning adviser in San Antonio, Texas. (ClarkHill.com)
