International News: Spotlight on Tax - McDermott Will & Emery


It is always the case that businesses must keep up with changes to tax rules, but never have tax rules had to pay equally close attention to changes in business. The evolution of technology and the internet age have driven seismic shifts in the ways companies operate, and presented new challenges for tax regimes.

The long-awaited Organisation for Economic Co-operation and Development (OECD)/G20 Global Anti-Base Erosion Model Rules, intended to address perceived challenges to longstanding international taxation principles by the increasing digitalisation of the economy, are coming closer to becoming a reality with the agreement by 137 OECD/G20 countries and jurisdictions to join the official statement of the Two-Pillar Solution. But we’re still not there yet. Similarly, despite the Non Fungible Token (NFT) market being worth US$21 billion, the US Internal Revenue Service (IRS) still hasn’t explicitly stated how NFTs will be taxed.

Without clear rules and guidance, businesses need to be highly vigilant. The continuing trend of working outside the office means international companies must ensure their remote workforce doesn’t inadvertently trigger tax liabilities by creating a permanent establishment or permanent representative; and trustees must undertake regular reviews to ensure changes within the trust don’t generate new taxable events. In addition, companies need to be aware of how expected changes to tax laws may be more aggressive than anticipated, such as the withdrawal by the US IRS of certain foreign tax credits.

Please contact the authors directly if you have any comments on our articles, or would like to discuss any of the issues raised.


Introduction to US Taxation of NFTs

Despite Non Fungible Token (NFT) sales hitting nearly US$21 billion by the end of 2021, making NFTs almost as valuable as the global art market, they are currently completely ignored by the US Internal Revenue Service (IRS) in the agency’s pronouncements on the taxation of cryptocurrencies. Read more.

UK VAT and Withholding Tax Considerations for Impact Bond Structures

Ranajoy Basu | James Ross | Priya Taneja | Sarah Gabbai

Designing the tax structure early on in the process of developing “pay for performance” cross border funding mechanisms is as important as designing clear impact metrics. Read more.

German Tax Aspects of Cross-Border Remote Working

Dr. Gero Burwitz | James Ross, Paul McGrath, Jilali Maazouz, Abdel Abdellah, Romain Desmonts

As a result of the COVID-19 pandemic, remote working became a necessity. Despite the easing of lockdowns, the trend is likely to stay, particularly with “workations” being actively promoted by the travel industry, but there are considerable tax consequences for international employers. Read more.

New US Treasury Regulations Deny Foreign Tax Credits for Previously Creditable Foreign Taxes

Brian H. Jenn

New regulations adopt a new “attribution requirement” that restricts the availability of foreign tax credits (FTCs) to foreign taxes that the US Treasury and Internal Revenue Service (IRS) consider to be similar to US taxes. Read more.

Relaunching the United Kingdom as the European Centre of Alternative Asset Management

Kevin Cummings

In an attempt to claw back some of the business lost as a result of Brexit, the UK Government has launched a version of the “asset holding companies” (AHCs) that made Luxembourg and Ireland such attractive destinations. Read more.

Trustees and the Need for Reviews

A recent case illustrates the importance of regular trust reviews. Read more.

An Overview of OECD Pillar 2

Brian H. Jenn | Annette Keller | Dr. Dirk Pohl | James Ross | Andrea Tempestini | Antoine Vergnat | Romain Desmonts | Alessio Persiani

Potential new tax rules would significantly impact the taxation of multinational groups, introducing new complexity to international taxation and nullifying the benefit of tax incentive regimes employed by many countries to attract foreign investment. Read more.