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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More from across our site

The plan, outlined by EU tax commissioner Wopke Hoekstra, would reportedly free 180,000 of the 200,000 in-scope businesses from additional compliance
The move to a new ‘high spec’ hub is slated for 2026; in other news, India reassesses its pillar two participation following the US’s withdrawal
The enacted legislation, which introduces a suite of new indirect taxes, was ‘highly awaited’ but presents major concerns, advisers tell ITR
Recent ATO guidance on how companies can demonstrate arm’s-length funding highlights how it is ‘one of the most transparent tax authorities in the world’, one adviser tells ITR
The proposed Block TP Assessment could provide taxpayers with long-term arm’s-length price certainty and reduce admin headaches, Sanjay Sanghvi of Khaitan & Co writes
India’s budget changes goods and services tax rules; UK private school VAT challenge fast-tracked
It is understood that the US has vowed to oppose any outcome from talks taking place at the UN
It’s the second year in a row that RSM’s tax business has posted fee income growth above 10%
Recent guidance from the Indian tax authorities should provide confidence for investors, says Sanjay Sanghvi of Khaitan & Co
Grant Wardell-Johnson also suggests there could be solutions to the friction between the US and the OECD when it comes to pillar two
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