Avocado Roundup: US Won't Sign Pillar 1 Treaty Before Next Year, Yellen Says
Avocado Roundup is a quick review of top tax, legal, and climate news stories. It’s written by humans.
The United States won’t be ready until sometime next year to sign the OECD-brokered treaty aimed at ensuring giant tech companies and other major multinational enterprises pay tax where they do business, US Treasury Secretary Janet Yellen told reporters Monday. She spoke in Luxembourg after meeting with European Union finance ministers. Her comments on the treaty start at about 5:57 into the video. (Europa.EU)
Released last week by the Organization for Economic Cooperation and Development, the Multilateral Convention to Implement Amount A of Pillar One is a core piece of the OECD’s two-pillar plan for reforming the international tax framework to address challenges posed by globalization and digitalization of the economy.
The treaty would create a mechanism for reallocating rights to tax giant multinationals from investment hubs, where multinationals park large amounts of their profits, to market jurisdictions, where the companies make most of their sales revenues. (LegalAvocado.com)
Could Unleash National Digital Services Taxes
That’s a measure the US demanded, and putting it on ice could expose US tech giants to national digital service levies around the world.
Yellen said much of the treaty has been agreed to in negotiations, but some open issues important to the US and other countries remain unresolved. “So this process will take into next year.”
She said the US has circulated the treaty for a 60-day consultation. “We think it’s critically important for a treaty of this level of importance and complexity to show it to the American public, to Congress, to the business community to hear what their reactions are,” and to “have solid support,” she said. (Europa.EU)
European Council Adopts Dac8 Directive
The European Council adopted a directive amending EU rules on administrative cooperation in the area of taxation. The amendments in particular would require EU member state tax authorities to report and automatically exchange information on revenues from transactions in crypto-assets and on advance tax rulings for high-net-worth individuals. (Europa.EU)
European finance ministers updated the EU tax havens list, adding Antigua, Belize, and the Seychelles and removing the British Virgin Islands, Costa Rica, and the Marshall Islands. Oxfam EU tax counsel Chiara Putaturo called the list “toothless,” noting it leaves off the US and the UK, and what she called “EU tax havens like Luxembourg and Malta.” (Oxfam.org)
The 25-member UN Tax Committee Tuesday began a four-day meeting in Geneva with an agenda that includes considering proposals for the UN to take a greater role in developing global tax policy. (UN.org)
US Watchdog Said to be Investigating PwC Australia
The US Public Company Accounting Oversight Board is investigating PwC Australia’s tax leaks scandal, after the firm missed a self-reporting deadline, according to a report. (Australian Financial Review)
The pro-business French government is reportedly considering early use of a mechanism to ram its draft 2024 budget bill through an uncooperative Parliament. Last week, the National Assembly’s finance commission considered thousands of amendments to the bill, adopting several tax hikes the government opposes. The full Assembly began debating the bill Tuesday, days after the finance commission rejected the government text in a symbolic 19-16 vote. (Les Echos)
Florida-based Gunster hired tax lawyer David Sawyer as of counsel in Fort Lauderdale. He’s been partner at several Big Law firms and recently served as top lawyer and corporate secretary at Sawyer Business Group, Inc. in Richmond Virginia. Gunster also hired Shook Hardy & Bacon business litigator Devin Moss in Miami as shareholder. (Gunster.com)
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