ITR Spring Issue 2023: Editorial

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ITR Spring Issue 2023: Editorial

EU - pillar two.jpg

ITR’s latest quarterly PDF is going live today, leading on the EU’s BEFIT initiative and wider tax reforms in the bloc.

Our cover story looks at the European Commission’s work on the Business in Europe: Framework for Income Taxation initiative and what companies want to see from it. It’s crunch time for European governments to decide whether there will be an EU corporate tax system.

An EU-wide corporate tax base with its own transfer pricing (TP) rules may finally be designed this year. The European Commission has taken some old ideas like the common consolidated corporate tax base and combined them with new concepts from the OECD’s two-pillar solution.

A limited version of formulary apportionment may one day become a reality in the EU, but there are many obstacles to pass along the way. The future of the arm’s-length principle and the prospects for a global minimum corporate tax rate are at stake.

Turning abstract concepts into concrete policies is easier said than done. The OECD may have created the groundwork for BEFIT, but the Commission’s initiative could become an example of how pillars one and two should work in practice.

We have a comprehensive issue of ITR this season, covering everything from the Brazil-UK tax treaty and the tax challenges of global mobility to Indian tax disputes and the TP impact of US sanctions on China. This issue includes an analysis of the US budget proposal for 2024 and two features on the implementation of pillar two in Asia.

Meanwhile, the Supreme Court of Canada is going to hear a case brought by Dow Chemical in its bid to secure a hearing at the Tax Court of Canada. This dispute will set a crucial precedent for taxpayers.

As we get further into 2023, the pace of change in tax continues to gather momentum. The OECD may have secured a global minimum corporate rate, but taxpayers are still waiting to see if there will be a final deal on pillar one this summer.

Read the ITR Spring Issue 2023 here

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Tax expert Craig Hillier agrees with the comparison of pillar two to using a sledgehammer to crack a nut
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The US president also unveiled a new 50% levy on copper imports; in other news, a UK wealth tax proposal has been criticised by the Institute for Fiscal Studies
Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
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ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
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ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
The fates of pillars one and two hang in the balance after the US successfully threw its weight around in G7 and Canadian negotiations
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