Tax developments
Other countries’ response to United States position on the Global Tax Deal
On Friday, President Trump issued a memo discussing his administration’s intent to defend US companies from unfair foreign taxes and regulations that “undermine the global competitiveness of US companies.” The memo directs various agencies to investigate discriminatory foreign government practices (i.e., foreign governments imposing a fine, penalty, tax, or other burden on intellectual property owned by US companies) and develop recommendations for responsive action, including potential tariffs, by April 1, 2025. This follows on the “Organization for Economic Co-operation and Development (OECD) Global Tax Deal (Global Tax Deal)” executive order that was issued on President Trump’s first day in office. Under that order, the administration (i) made null any commitments made by the Biden administration with respect to the Global Tax Deal and (ii) announced that the administration will be reviewing a list of options for protective measures to take in response to any discriminatory or extraterritorial tax measures. Such list is to be prepared by the Secretary of the Treasury Department by March 20, 2025.
These actions by the administration have prompted some, including the Finance Ministers of Hungary and India, to question the continuing viability of the Global Tax Deal. The European Union’s (EU) Economy Commissioner confirmed that the EU is still committed to the Global Tax Deal. At this point, there is no indication that any country will modify its rules in response to the US actions, but it will be important to continue to monitor, particularly with respect to the application of the Under Taxed Profits Rule (UTPR) and the imposition of Digital Service Taxes (DSTs) by non-US jurisdictions.
It’s back! The latest twist in the CTA saga
On February 18, 2025, the Eastern District of Texas granted the government’s motion and lifted the stay on FinCEN’s enforcement of the Corporate Transparency Act (CTA) pending disposition of the appeal to the Fifth Circuit. See Smith v. Department of Treasury, 6:24-cv-0036 (E.D. Tex.). As previewed in its motion in Smith to lift the stay, FinCEN granted a 30-day reprieve for companies to comply with their beneficial ownership interest (BOI) reporting obligations. Therefore, reporting companies currently have until March 21, 2025 to file their BOI reports.
While additional changes may be on the horizon, in the meantime, companies should prepare to comply with the CTA’s reporting requirements by March 21, 2025. For a more detailed discussion regarding these developments, see And just like that—the Corporate Transparency Act is back!.
Recent Eversheds Sutherland Tax insights
A look at the Trump administration’s executive orders pertaining to workplace anti-discrimination measures
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