U.S. Senate Finance Committee Released Draft International Tax Law
On August 25, US Senate Finance Committee Chairman Ron Wyden (D-Oregon), US Senator Sherrod Brown (D-Ohio) and US Senator Mark Warner (D-Virginia) released a bill to to revise international taxation and an article by article corresponding. summary of the topic. Senators propose several changes to the existing GILTI regime, such as (1) eliminating the QBAI exemption, (2) changing the GILTI calculation to exclude high tax income (“high tax exclusion”), and ( 3) providing details on how to calculate the high tax exclusion offered by GILTI country by country. At this time, it is not clear how the planned changes to GILTI should interact with OECD efforts under Pillar II. The Senators are seeking comments on the draft by September 3, 2021.
France will not pressure Ireland to adopt the OECD global tax deal
Ireland is one of three EU members to reject the global minimum tax accepted by more than 130 countries. On August 26, French President Emmanuel Macron met Irish Prime Minister Micheál Martin during his first state visit to Ireland. It was reported that during a press conference alongside Prime Minister Martin, President Macron said France would not pressure Ireland to adopt the global tax deal proposed by the OECD , but the proposals are reasonable for all EU countries, including Ireland.
U.S. Trade Representative Tai discusses DST with Turkish Minister Muş
The U.S. Trade Representative’s office previously imposed and then suspended tariffs on items from six countries, including Turkey, in retaliation for unilateral digital services taxes (“DST”) imposed by the six countries . On August 25, US Trade Representative Katherine Tai held a virtual meeting with Turkish Trade Minister Mehmet Muş and discussed DST. According to the minutes of the meeting, “Ambassador Tai said that the United States views the removal of individual DSTs as critical in the processes of the Organization for Economic Co-operation and Development (OECD) and the G20” as critical. .
Washington issues tax guidelines for online courses
The Washington Department of Revenue recently issued informal guidelines regarding the taxation of online courses. The guidelines state that live courses where participants can interact in real time with the presenter are not subject to sales tax; however, pre-recorded videos and lessons are subject to sales tax. This distinction focuses on the live ability to interact with the presenter – a chat room or help desk wouldn’t be enough to classify a class as tax-free. As an example, the guidelines state that classes in a fitness studio with two-way video and audio connectivity are not subject to sales tax, whether the fee is a monthly subscription or a per-class payment. However, a service that charges customers a monthly fee for live-streamed online cooking classes is subject to sales tax because there is no real-time interaction between the presenter and the students.
Electronic transfer of tax-free photographs to New York
The New York Department of Taxation and Finance recently issued Advisory Notice TSB-A-20 (66) S regarding the taxation of photographs supplied to buyers in digital form or via tangible medium for non-permanent use. The Department held that the electronic transfer of photographs is not taxable in New York because a digital photograph is not considered tangible personal property and, therefore, the transfer is not taxable, regardless of whether it is permanent. or temporary. The transfer of a photograph via a physical medium (CD, paper, slide, negative, etc.), is generally taxable because the mode of transfer is a taxable physical medium. However, if the transfer of a physical photograph is only temporary, as suggested by the requesting taxpayer, the Department has determined that it is not a taxable sale as long as (i) the client takes possession of the photograph solely for the purpose of making a reproduction, and (ii) payment is in the nature of a royalty.