What are the OECD Pillar 1 and Pillar 2 international taxation reforms? Q.What are the OECD Pillar 1 and Pillar 2 international taxation reforms? A.The Organization for Economic Cooperation and Development (OECD) and G-20 countries started the Base Erosion and Profit Shifting (BEPS) initiative in 2013 to combat aggressive tax avoidance by multinational corporations. Its Inclusive Framework now includes over 135 countries and jurisdictions working to implement different measures to limit tax avoidance, increase transparency, and create a more coherent international tax system. Read more about What are the OECD Pillar 1 and Pillar 2 international taxation reforms?
What is the TCJA tax on global intangible low-taxed income and how does it work? Q.What is the TCJA tax on global intangible low-taxed income and how does it work? A.GILTI is the income earned by foreign affiliates of US companies from intangible assets such as patents, trademarks, and copyrights. The Tax Cuts and Jobs Act imposed a new minimum tax on GILTI. Read more about What is the TCJA tax on global intangible low-taxed income and how does it work?
What are the consequences of the new US international tax system? Q.What are the consequences of the new US international tax system? A.Despite enactment of the 2017 Tax Cuts and Jobs Act, which reduced these incentives, current rules still encourage US multinational firms to earn and report profits in low-tax foreign countries, enable both US- and foreign-based firms to shift profits earned in the United States to other countries, and encourage companies to incorporate in foreign jurisdictions. Read more about What are the consequences of the new US international tax system?