International news
EU Finance Ministers skeptical of Pillar Two implementation timing
On January 18, French Finance Minister Bruno Le Maire’s demand that the EU swiftly adopt the global minimum tax rules during an EU Economic and Financial Affairs Council meeting was met with skepticism from finance ministers from Estonia, Poland, Hungary, Lithuania and Malta.
While the finance ministers generally showed support for the Pillar Two global minimum tax rules, the finance ministers expressed their concerns with the process and speed for adopting the global minimum tax rules reasoning that the tight implementation timeline might not work with their national lawmaking processes.
Taiwan moving forward with a 15% minimum tax
On January 14, Taiwan’s finance ministry announced that in response to the OECD implementation of the global minimum tax, Taiwan will adopt a 15% minimum corporate tax rate effective from January 1, 2023 to comply with the OECD Pillar Two.
OECD Commentary on Pillar Two expected in February
On January 14, Italian Ministry of Economy and Finance Director and OECD’s Committee on Fiscal Affairs Chair Fabrizia Lapecorella confirmed the anticipated timeline for the Commentary related to the model global minimum tax rules. It was reported that Lapecorella said, “We are pretty confident that we will complete that work in time, together with the completion of the multilateral convention, and this means that everything will be there [by] the end of the first semester of this year.”
EU views updated GILTI provisions equivalent to Pillar Two
It was reported that EU Director of Direct Taxation Benjamin Angel expects changes to the GILTI provisions under the Build Back Better legislation to ultimately pass and such changes would allow the EU to consider the GILTI provisions equivalent and consistent with Pillar Two global minimum tax rules.
US Senators express concerns on Canada’s unilateral DST
On January 12, Senate Finance Committee Chair Ron Wyden (D-OR) and Finance Committee Ranking Member Mike Crapo (R-Idaho) highlighted issues with Canada’s efforts in moving forward with a unilateral digital service tax (DST) in a letter to US Trade Representative Katherine Tai. Specifically, “[e]fforts by Canada to move forward with a unilateral DST risk setting a troubling precedent that would undermine years of work by negotiators at the OECD,” the authors said.
United States news
Nevada Tax Commission issues draft regulation for marketplace sellers and facilitators
The Nevada Tax Commission proposed draft regulations implementing sales and use tax collection requirements for marketplace sellers and facilitators without a physical presence in Nevada. In determining whether marketplace sellers or marketplace facilitators meet the Nevada threshold of $100,000 in gross receipts from Nevada retail sales or 200 separate retail sales not for resale through all sources (including various marketplace facilitators) are used. A marketplace seller meeting the threshold, but with no physical presence, making sales only through marketplace facilitators is not required to register for sales tax if the marketplace facilitators are all registered to collect and remit the tax. If the marketplace seller makes sales through an unregistered marketplace facilitator, the marketplace seller must register, collect, and remit tax on those sales. A marketplace facilitator must provide the marketplace sellers notice that it will be collecting and remitting the tax on all applicable sales; or, if not registered, a marketplace facilitator must provide notice to the marketplace sellers that they may be required to register, collect, and remit tax on Nevada sales.
Private wireless network not taxable in Missouri
The Missouri Department of Revenue released a private letter ruling issued in December 2021 determining that a company’s private wireless network was not subject to Missouri sales tax. The company provides wireless services in Missouri, including voice, messaging, Internet access and private network services. The private network services provide machine-to-machine data transmission, which is segregated from the public internet and not connected to the public switched telephone network. The private network services allow for secure connections between a customer’s internal network and wireless-enabled devices located within the coverage area served by the company’s wireless network. The Department concluded that the private network services was not taxable as a telecommunications service as it was not an “interconnected” service connected to the public switched network and was not captured within the definition of any other enumerated taxable service.
