Policy Positions and Statements Archives

USCIB Acknowledges the G20 Finance Ministers Endorsement of the October Two-Pillar Global Tax Proposals

Published on October 14, 2021

Washington D.C., October 13, 2021—The United States Council for International Business (USCIB) notes the endorsement by the G-20 Finance Ministers today of the OECD/G20 Inclusive Framework landmark deal announced on October 8. The deal, agreed by 136 countries, including the US, establishes a new framework for international tax reform represented by two distinct proposals or pillars. The two-pillar solution will be delivered to the G20 Leaders’ Summit in Rome at the end of the month while the intensive work on the design and drafting of the numerous parts of the deal continues into 2022.

“The OECD has once again reached a significant milestone on schedule and was able to add a handful of key countries into the fold of the deal agreement since July,” said USCIB Vice President and International Tax Counsel Rick Minor.

The October deal terms include a long list of technical work that must still be completed in relatively short order according to the OECD timeline. USCIB Tax Committee company members are positioned to directly advise the OECD drafting teams through its membership in the Business at OECD Taxation Committee. According to Minor, “putting aside the ambitious timelines through 2022, our members will be focused on the development of the design and details for key aspects of each of the pillars. With respect to Pillar One, this includes, but is not limited to, dispute prevention and resolution mechanisms, the tax liability rules, revenue sourcing, the marketing and distribution safe harbor and so-called Amount B. We are also mindful of the fact that the drafting of the Pillar Two rules is on a parallel path with the numerous GILTI deliberations in Congress this fall which arguably puts pressure on that process if there is no coordination in review.” USCIB will remain engaged in the OECD rule design process through Business at OECD and directly, through the appropriate engagement.

About USCIB

USCIB promotes open markets, competitiveness and innovation, sustainable development, and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. As the U.S. affiliate of the International Chamber of Commerce (ICC), the International Organization of Employers (IOE) and Business at OECD (BIAC), USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade and investment. More at www.uscib.org.

Contact:

Rick Minor

VP and International Tax Counsel

rminor@uscib.org

In the News: USCIB Quoted in Tax Notes Following OECD Global Tax Update

Published on July 8, 2021

USCIB Vice President for Taxation Policy Rick Minor was quoted in a lead article in Tax Notes on July 6 regarding the significant global tax update statement made on July 5 by the Organization for Economic Cooperation and Development (OECD).

The OECD inclusive framework on base erosion and profit shifting confirmed that 130 of its 139 members have agreed on key elements of the plan, which aims to address the tax challenges of an increasingly digital and globalized economy.

According to the OECD, the 130 countries and jurisdictions represent more than ninety-percent of global GDP.

In the Tax Notes article, Minor said the USCIB’s members will follow the inclusive framework’s progress closely. “I understand the next significant document will be the design and implementation plan mentioned in the statement,” he said. “We should expect consultation with the business community will continue more earnestly now.”

USCIB Tax Committee members Will Morris (PwC) and Robert Stack (Deloitte) were also quoted.

USCIB Submits Comments to USTR on Proposed Digital Services Taxes

Published on July 21, 2020

USCIB provided comments to the United States Trade Representative (USTR) regarding the proposed Digital Services Taxes (DSTs) of several countries, including Austria, Brazil, Czech Republic, India, Indonesia, Italy, Spain, Turkey, the United Kingdom, as well as the European Union.

USCIB’s submission focused on whether these countries violated Section 301 while encouraging the U.S. to seek a multilateral solution.

“The DSTs under investigation are a poor choice to address the tax issues arising from digitalization of the economy and will work against the economic recovery they are intended to help fund,” said USCIB Vice President for Taxation Policy Carol Doran Klein. “Rather, the U.S. should work cooperatively to find an appropriate multilateral solution to taxing the digitalizing economy that does not unduly burden U.S. interests and fosters certainty for business.”

USCIB Statement to US Government on Remote Worker Relief

Published on July 2, 2020

USCIB has joined with over a dozen other associations to issue a statement on July 2 to urge the federal government to allow an employee’s wages to be treated as being earned at their normal work location and to have Congress protect health care and other workers travelling across state lines to help with the COVID-19 response. The full statement:

“The dual challenges of the COVID-19 pandemic and an economic crisis have created significant disruption and uncertainty for American workers. To lighten the burden on individuals and families, the undersigned associations strongly urge that you support legislation addressing state and local tax confusion arising for employees required to work remotely because of COVID-19.

“Providing this certainty at an otherwise uncertain time is essential. Without Congressional action, employees may receive unexpected and unwelcomed tax surprises when they file their 2020 state and local income tax returns next year – and face penalties and interest charges (and even potential double taxation) through no fault of their own. A federal solution is needed because the states are taking different and conflicting positions on how the income of workers displaced by the pandemic should be taxed. Solving this problem will ensure employees who are working remotely during the pandemic are not penalized for doing so.

“Currently, wages earned by an employee generally are subject to tax by the state where they work. However, due to COVID-19, many workers are unable to report to their normal work location and are working in a different state than usual due to local law restrictions, closed schools, family health or other reasons, complicating their state tax reporting obligations.

“The solution to this problem is simple: enact federal legislation that reduces uncertainty by allowing an employee’s wages to be treated as being earned at their normal work location. Congress should also protect health care and other workers traveling across state lines to help with the COVID-19 response from surprise or higher tax bills. The Remote and Mobile Worker Relief Act of 2020, S. 3995, recently introduced by Senators John Thune (R-SD) and Sherrod Brown (D-OH), would accomplish these goals. These solutions will maintain the status quo by putting wage earners and their employers in the same tax position they would have been in, but for the pandemic, while providing important certainty to workers who temporarily relocate to provide critical assistance during this pandemic.

“We urge the inclusion of these changes in the next COVID-19 legislation.”

USCIB Statement on OECD’s Inclusive Framework

Published on June 23, 2020

USCIB has issued the following statement on June 23 with regards to the OECD Inclusive Framework process:

USCIB remains committed to proactive participation in the current OECD Inclusive Framework process to achieve consensus on acceptable modifications to the international tax system to properly address the tax challenges of the digitalization of the economy.

USCIB and its member companies will continue to work diligently towards a sustainable agreement and will encourage the U.S. government to remain committed to this process.

USCIB Objects to Implementation of Digital Service Taxes by France

Published on July 17, 2019

Washington, D.C., July 17, 2019 – Responding to the recent announcement by France to implement a digital service taxes (DST), the United States Council for International Business (USCIB), which represents America’s most successful global companies, urges countries to avoid unilateral measures and instead pursue a consensus-based, comprehensive and income tax-based solution. USCIB supports the OECD Inclusive Framework process for reaching agreement on these global issues.

The French law will impose a tax of three percent on certain revenue earned by technology companies including advertising, commissions from digital marketplaces and sales of data.

“Taxes on revenues are distortive,” said USCIB Vice President for Tax Policy Carol Doran Klein. “The total tax may exceed company profit and misallocate profits to the market jurisdiction. Any solution should be treaty compliant and designed to avoid controversy. It should tax income based on where value is created by companies, including appropriate recognition of where intangibles are created. Furthermore, any solution should not discourage innovation.”

Klein also warned that the French tax will not be easy to implement and will put a significant burden on companies to set up systems to track global revenues. “Implementing such new systems would be both time consuming and expensive – not simple or easily implemented – and would divert company resources from useful profit-making activities.”

“It is unfortunate that France has decided to repeat the mistakes identified in the debate over the unsuccessful EU DST,” said Bill Sample, chair of USCIB’s Tax Committee. “I urge France to focus their energies on reaching a consensus solution within the OECD’s Inclusive Framework for a sustainable international tax system that recognizes innovation and production and minimizes the adverse impact of the costs of double taxation on business investment and growth.”

USCIB reiterated its concerns in a letter to the government of New Zealand, which is also looking at options for taxing the digital economy.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of the International Chamber of Commerce, the International Organization of Employers and Business at OECD, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

USCIB in the News: Joint Letter Seeks Fair Play in India

Published on February 6, 2017

USCIB has recently been cited in two articles, the Economic Times India and the International Business Times India,  both of which featured a multi-industry letter that was sent to Congress regarding the United States’ role in ensuring fair play in India for American companies. USCIB joined a group of over twenty eminent American business organizations and industry groups, many of which are also USCIB members. The letter stated that “businesses in the U.S. continue to face an evolving array of tariff and non-tariff barriers, both longstanding and new, which impede businesses and manufactures in the United States from competing fairly in India and creating jobs here at home.”

The letter urges the U.S. government, including Congress, to use all available channels to ensure fair play and to support Indian efforts that align with U.S. goals. The letter emphasized the need to actively use existing as well as new platforms and tools to raise and resolve longstanding issues, including the U.S.-India Strategic and Commercial Dialogue, the U.S.-India Trade Policy Forum, and the WTO dispute settlement.

The letter is available here.

USCIB Adds Its Voice to Concerns with BEPS

Published on July 10, 2015

taxes-portUSCIB joined the Software Finance & Tax Executives Council and the National Foreign Trade Council in signing a letter to U.S. Treasury Secretary Jacob Lew citing concerns with the OECD’s Base Erosion and Profit Shifting (BEPS) project. The letter notes that the threat of double taxation will have a negative impact on global trade and investment.

The BEPS project is an effort by the OECD to rewrite global rules that tax profits where economic activity is generated, without imposing undue compliance costs on taxpayers.

“Throughout the BEPS process, U.S. business has been pressing for clarity,” the letter states. “The lack of clarity and threat of double taxation will create uncertainty which will have a negative impact on global trade and investment.”

Read the letter.

L-R: Grace Perez-Navarro (OECD), Carol Doran Klein (USCIB), David Camp (PwC), Pascal Saint-Amans (OECD)
L-R: Grace Perez-Navarro (OECD), Carol Doran Klein (USCIB), David Camp (PwC), Pascal Saint-Amans (OECD)

Last month, USCIB hosted its tenth annual OECD International Tax Conference in Washington, D.C., which took stock of BEPS and its impact on international trade and investment.