Event 23 Aug. 2023
Partner Borzu Sabahi Speaks at the 52nd IDRI Professional Accreditation & Membership Programme
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Event 14 Oct. 2022
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Event 18 Aug. 2023
Partner Borzu Sabahi Speaks at FDI Moot Shenzhen
News 25 Jul. 2023
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Article 22 Aug. 2023
Fuad Zarbiyev Publishes Article in Journal of International Economic Law
Client Alert 14 Aug. 2023
The EU’s Market in Crypto Assets (MiCA) Regulation: The Highlights
Event 22 Aug. 2023
Partner Dr. Claudia Frutos-Peterson to Speak at Arbitration and ADR Commission of the ICC Mexico
Event 11 Jul. 2023
Partner Elisa Botero Speaks on the Role of the ICC in Investment Disputes
News 15 Aug. 2023
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News 31 Jul. 2023
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News 24 Aug. 2023
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News 06 Mar. 2023
Russia Sanctions at the First Anniversary: An Overview of Current Sanctions in the US, UK, and EU and How Global Companies Can Navigate Evolving and Conflicting Sanctions Regimes
Client Alert 30 Aug. 2022
The EU Adopts the “Maintenance and Alignment” Sanctions Package
Client Alert 24 Jun. 2021
Update on Virtual Notarization (Executive Order 202.7) During the COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021) — U.S. Insight
Update on Virtual Witnessing (New York Executive Order 202.14) During The COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021) — U.S. Insight
Client Alert 18 Aug. 2021
The alert is available for download here.
On July 10, 2021, the G20 Finance Ministers announced that they have endorsed the key components of the revised two pillar approach to address the tax challenges arising from the digitalization of the economy contained in the Statement by the OECD Inclusive Framework (“IF”) issued on July 1, 2021. The Statement provides that 132 of the 139 IF members had agreed on this approach. As of today, the only members of the IF that have not signed up to both pillars are Barbados, Estonia, Hungary, Ireland, Kenya, Nigeria and Sri Lanka.
Pillar One introduces measures to allocate certain taxing rights over profits of multinational entities (“MNEs”) above a 10% “net profit margin” threshold to end-market jurisdictions (i.e. jurisdictions where end users and consumers of digital services are located). As originally conceived in the October 2020 Blueprint (“Blueprint”), Pillar One was intended to apply to MNEs operating in the Automated Digital Services (“ADS”) and Consumer Facing Businesses (“CFB”) industries. The Statement revises this approach so that Pillar One would instead apply to MNEs with a global revenue of at least EUR 20 billion (approximately $ 23 billion) and a net profit margin above 10%. According to the Statement, after seven years, the scope could be further widened to apply to MNEs with a global revenue of at least EUR 10 billion (approximately $ 12 billion), pending successful implementation of Pillar One. Certain businesses including regulated financial services businesses are excluded from the scope of Pillar One.
Pillar Two introduces a global minimum effective tax rate of at least 15% through the implementation of the so-called Global Anti-Base Erosion (“GloBE”) rules to ensure that MNEs are adequately taxed on their profits. The GloBE rules would function as a top-up tax on a parent entity of the MNE, where its affiliates are taxed in local jurisdictions below the minimum rate (certain other rules denying deductions for payments to such affiliates would also apply). Pillar Two would apply to all MNEs with a global turnover in excess of EUR 750 million (approximately $ 880 million). The international shipping industry is excluded from the scope of Pillar Two.
Discussions with respect to the design elements of the agreed upon two pillar approach will continue, with the IF intending to finalize such issues and put forth a detailed implementation plan by October 2021. Pillar One will be implemented through a multilateral instrument, which will be developed and open for signature in October 2022, and become effective in 2023. IF members will not be required to adopt the GloBE rules, but if they do, they would do so consistently with the approach of Pillar Two. Pillar Two is intended to be brought into law in 2022, and effective in 2023. The Pillar Two implementation plan would include mechanisms for coordinating GloBE rules implemented by the IF members.
Tax
Marco A. Blanco
Partner
Klas Holm
Olga R. Beloded
Christian Fingerhut
New York
+1 212 696 6000
Geneva
+41 22 718 3500
Paris
+33 1 42 68 72 00
Client Alert 12 Sep. 2023
The European Commission Published the T&Cs for the Innovative Fund H2 Auction
Event 08 Sep. 2023
Curtis Environmental Chair Charles Howland to Speak on the Latest Developments in Environmental Due Diligence at ABA Masterclass on Environmental Transactions
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