The issue of corporate taxation has taken center stage in many policy-makers’ minds across the world, yet difficulties in agreeing on a solution seem to have resulted in an effective “paralysis.”
According to PwC and OECD data cited by The Economist, the global average corporate income tax as a share of profits is continuing to drop precipitously. From an average of over 19 percent in 2004, the figure had dropped to roughly 16.5 percent by 2012. As a percent of GDP, the average revenues from corporate income tax for the OECD rose to a high of just over 3.5 percent in 2006 before falling in the recession to approximately 2.25 percent. This figure did recover by 2012 to just below its 2004 level of about 2.8 percent.
In response, the 2012 G20 called on the OECD to find consensus as to how to close the loopholes in international tax standards that multinationals exploit to lower their bills, according to the news source. After two years, the OECD presented its plan to the 2014 G20 on Sept. 20 for approval, which it received.
The proposal attempts to curb a number of practices and is to be followed by a second part next year. Practices that would be banned or curbed include “transfer pricing,” by which multinationals shift profits to low-tax countries by charging fees between different subsidiaries they own, and “hybrid mismatching,” which allows companies to claim double deductions by classifying financial instruments as debt in one country and equity in another. Additionally, it would allow member countries to share information about multinationals’ assets, sales, profits, etc among other measures.
Unfortunately, the next stage is genuinely much harder, according to The Guardian. Agreeing to a measure at the G20 is one thing – expecting every OECD country to embed the measures into the more than 3,000 tax treaties of global trade is quite another. Clearly, many countries are dedicated to ending the “race to the bottom” that has characterized global corporate tax policy issues over the last several years, but the current measure should be considered with some skepticism.
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
Read Before You Sign: IT Contract Pitfalls Every NJ Business Should Know
In today’s digital economy, New Jersey businesses of all sizes rely heavily on technology vendors, software providers, cloud platforms, and managed IT services. Whether your company is purchasing software, migrating data to the cloud, engaging a cybersecurity consultant, or entering into a long-term managed services agreement, a careful IT contract review can have significant operational, […]
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
