USCIB in the Press: USCIB Webcast With KPMG Highlighted in Bloomberg Tax 

USCIB was highlighted in a Bloomberg Tax article on March 28 titled “OECD Mulls Using Risk assessment Tool for Global Tax Deal.” USCIB was mentioned in the context of a webinar that USCIB co-hosted with member KPMG.  

The webinar featured Nicole Casey from the OECD’s Center for Tax Policy and Administration. Casey provided comments to USCIB members on the OECD potentially using one of its existing tools to give taxpayers the ability to gain more certainty under the global tax deal.  

The article, written by Lauren Vella, is accessible via subscription to Bloomberg Tax. 

For more information on this webinar, please click here. 

USCIB in the News: Bloomberg, Tax Notes Quote Rick Minor on New OECD Report on Amount B

SVP Rick Minor was quoted in both Bloomberg and Tax Notes this week following the February 19 release of the OECD’s new report on Amount B, one of the key components of Pillar One of the OECD’s global two pillar solution project.

In Bloomberg Tax, Minor said: “I feel there remains a degree of uncertainty regarding the prospects for broad adaptation of Amount B, directly and indirectly, on which we had placed considerable value from the outset.” Minor expressed concerns “in the context of a mutual agreement procedure, where a treaty partner isn’t obligated to accept the Amount B analysis of another jurisdiction if the first treaty partner doesn’t agree to Amount B.”

To access the full Bloomberg article, please click here to read with a subscription.

The Tax Notes article, titled, OECD Sets Out Amount B Transfer Pricing Simplification Framework, is also available with a subscription and can be found here.

Rick Minor Quoted in Bloomberg Law on OECD Tax Deal, Advocates for Extended Time for Business to Provide Feedback

USCIB Vice President and International Tax Counsel Rick Minor was quoted in a Bloomberg Law article yesterday regarding the Department of Treasury’s handling of a complex Organization for Economic Cooperation and Development (OECD) tax treaty. Treasury is awaiting business input by December 11, with the deadline for the treaty set on December 31. This treaty would reallocate residual profits of big corporations to market jurisdictions under Pillar One of the two-section tax deal.

Minor was quoted as saying, “USCIB views it as essential for Inclusive Framework members, in-scope businesses, and other stakeholders to be given more time beyond the end of this calendar year to complete this important work.” This quote stems from a letter that was sent to Treasury on November 15.

Business has expressed concern that Treasury’s solicitation of feedback from stakeholders may be the administration’s attempt to buy more time for negotiations before any significant decision-making occurs by nations. This move also shifts pressure regarding the treaty’s success or failure away from negotiators and onto business. However, the comment period also sends the message that the U.S. is taking this treaty seriously, as doubts continue to exist about whether the negotiations will be fruitful.

The full article is available with a subscription to Bloomberg Tax and can be accessed here.

Rick Minor Quoted in Bloomberg Tax on Yellen, Advocates for One-Year Extension of DST Moratorium   

USCIB VP and International Tax Counsel Rick Minor was quoted in a Bloomberg Tax article yesterday regarding Treasury Secretary Janet Yellen’s statement regarding the Pillar One Multilateral Convention deliberations timeline being extended into 2024. Yellen was silent on the moratorium on digital services taxes (DSTs) that is set to expire at the end of this year.

In the article, Minor was quoted as saying, “Yellen’s statement clarifies the timeline, and pushing the process into 2024 makes sense, to give Treasury a realistic chance to digest and react to business feedback to the draft treaty.”

Minor was also quoted as saying he “hoped an announcement will be made soon about extending the DST moratorium. Such a move would be ‘natural.’”

But what Minor actually stated to Bloomberg was “it would now be natural to extend the DST moratorium for another year if the multilateral convention (MLC) signing timeline for 2024 cannot yet be defined and we hope that such an announcement can be made soon from the OECD.”

This will surely be a topic during the upcoming OECD-USCIB International Tax Conference at the Four Seasons in Washington, DC October 30-31.

The full article is available with a subscription to Bloomberg Tax and can be accessed here.


USCIB Letter to OECD on Pillar 1 and DSTs Quoted in Tax Press

USCIB’s advocacy on international tax policy was referenced in a recent Bloomberg article titled, US Seeks to Extend Digital-Tax Freeze as Global Deal Stalls. The article references a letter that USCIB submitted to the OECD Centre for Tax Policy and Administration Director Manal Corwin, requesting the OECD to extend a moratorium on Digital Service Taxes (DSTs). USCIB raised several concerns about Pillar 1 including that a lack of extension of the moratorium poses a risk in triggering trade disputes with allies.

USCIB was also quoted in a Tax Notes article titled, US Trade Group Calls for Extending OECD Digital Tax Moratorium on the same topic. The article, which can be accessed behind a paywall, focuses on USCIB’s letter to the OECD and extensively quotes from USCIB’s letter.

“We encourage the OECD/G20 Inclusive Framework to agree to an extension of the so-called DST standstill agreement, so that no new DSTs are enacted as the work moves forward,” said USCIB Vice President and International Tax Counsel Rick Minor.

USCIB Tax Committee Work Featured in Bloomberg, Tax Notes International

USCIB and the USCIB Taxation Committee appeared prominently in the tax press this week—Tax Notes International and Bloomberg Tax—with coverage of a USCIB letter filed with the U.S. Treasury Department on April 25.  According to USCIB Vice President and International Tax Counsel Rick Minor, this was a unilateral consultation and not a letter related to a public consultation that USCIB’s Tax Committee is currently working on.

Bloomberg Tax quoted Minor and excerpts of USCIB’s letter in its article, Amount B Could Involve Routine Function List, Treasury Told. “Our members consider Amount B to be, as it has been described in the 2020 Pillar One blueprint, one of the key benefits of a Pillar One solution,” he said. “The concept is directly related to one of the fundamental goals of Pillar One, improved tax certainty.”

Click here for the Tax Notes International story. Below is the Bloomberg Tax coverage with quotes from Minor and excerpts from the USCIB letter to the Treasury Department.

Bloomberg Tax: Amount B Could Involve Routine Function List, Treasury Told

By Natalie Olivo · Apr 26, 2022, 8:01 PM EDT ·  Listen to article

An approach for determining Amount B — the routine portion of profits subject to allocation under a global corporate tax plan — could include an agreed list of functions related to these earnings, a U.S. business association told the U.S. Treasury Department.

The U.S. Council for International Business sent Treasury a letter Monday that listed marketing and distribution functions that relate to normal, or routine, returns that fall under Amount B of a tax agreement reached in October by an inclusive framework of nearly 140 jurisdictions. Amount B would simplify and streamline the application of the arm’s-length principle to in-country baseline marketing and distribution activities, according to the Paris-based Organization for Economic Cooperation and Development, which led negotiations on the tax rewrite.

Amount B falls under the overhaul’s first pillar alongside Amount A — a separate provision that involves a narrow departure from traditional arm’s-length transfer pricing rules, which divide intercompany profits based on how unrelated parties would behave. Under Amount A, large companies would reallocate a portion of their above-normal returns to market jurisdictions where they have customers but not a physical presence.

The USCIB told Treasury in its letter that Amount B must be anchored in the arm’s-length principle. The group included a list of entrepreneurial functions — which commonly generate residual returns that would fall under Amount A — and a list of routine marketing and distribution functions that would relate to normal returns under Amount B.

“These two categories cover a significant volume of the transfer pricing controversies of our members which we understand Pillar One is intended to largely eliminate,” the USCIB wrote.

The group’s list of entrepreneurial functions included final decision-making on large discounts and nonstandard contracts and setting global or regional branding, marketing, pricing and promotional strategies. As for routine marketing and distribution functions, the group’s list included bearing limited market and business risks, as the profits of routine distributors are fixed, in addition to not owning any high-value intangible property.

These lists were compiled by the USCIB’s members from company transfer pricing files, meaning they represent “functions that are audit tested and generally represent clear distinctions between entrepreneurial and routine functions,” according to the group’s letter.

Rick Minor, vice president and international tax counsel at the USCIB, told Law360 on Tuesday that his group wanted to be helpful in the absence of a formal consultation to offer timely guidance on Amount B to delegates of the inclusive framework.

“Our members consider Amount B to be, as it has been described in the 2020 Pillar One blueprint, one of the key benefits of a Pillar One solution,” he said. “The concept is directly related to one of the fundamental goals of Pillar One, improved tax certainty.”

So far, the OECD has only released draft rules aimed at helping countries implement Amount A in addition to the overhaul’s second pillar, which involves minimum tax rules. The organization has also released public feedback on its Amount A draft rules, including calls for guidance that would let multinational corporations seek advance certainty on how tax administrations would apply the new rules, including a proposed anti-abuse provision.

Meanwhile, KPMG issued a proposal for Amount A that was released Tuesday by Treasury’s Office of Tax Policy. According to the firm, the proposal involves identifying entities to fund Amount A and determining the share of Amount A that would be allocated to each payer entity.

This proposal would use a formulaic approach that approximates a “market-connection” test without the need to look at transfer pricing documentation or make factual judgment calls, according to KPMG.

Treasury didn’t immediately respond to a request for comment.

The USCIB Foundation’s COVID-19 Vaccine Initiative Lead Scott Ratzan on MSNBC

Dr. Scott Ratzan, who helps lead The USCIB Foundation’s Business Partners to CONVINCE  initiative, spoke on MSNBC on January 3, 2021 on the importance of the COVID-19 vaccine and the critical role of all sectors, including business, to engage in order to win “the war” against the coronavirus.

Business Partners to CONVINCE is a vaccine confidence initiative led by USCIB, The USCIB Foundation, and Business Partners for Sustainable Development.

ICC UK’s Chris Southworth Discusses Brexit Burdens in FT Letter

On February 8, the Financial Times published a timely letter from Chris Southworth, the secretary general of the International Chamber of Commerce ‘s UK national committee, on the adverse impact a “hard Brexit” could have on smaller British traders.

According to Southworth, all the excellent work to ensure port operations remain efficient post Brexit should not distract from the fact that the burden, risk and cost of new trading arrangements will be shifted upstream to companies who will have to do all the additional paperwork before their goods reach the port.

“We need the government to be a lot more honest with business. Leaving the single market will mean hard borders and new burdens,” he wrote in the letter.

To read the full letter, visit FT’s website (paid subscription required). Click here to visit ICC UK’s website.

In Op-ed, Robinson Stresses Business’s Critical Role in WTO Modernization

With members of the World Trade Organization set to launch new talks on digital trade amid calls for the organization to be reformed, USCIB President and CEO Peter Robinson has appealed for a strong business role in efforts to modernize the global trade body.

In an op-ed published in The Hill, USCIB’s president wrote: “The views of the private sector, which has a direct stake in the rules that result from such government-to-government discussions, should be actively solicited and given careful consideration by WTO member states.”

Robinson called on governments to strengthen the WTO in four key areas:

  • tackle subsidies and the role of state-owned enterprises
  • develop new rules for cutting-edge trade issues
  • modernize the WTO’s rules and procedures, and
  • improve the WTO’s dispute settlement mechanisms

“If governments work with business, we are confident that the WTO can be reformed and modernized to continue effectively advancing a rules-based global trading system,” Robinson wrote. Read the full op-ed on The Hill’s website.

US-China Trade: Hampl Speaks With BBC Radio

USCIB’s Eva Hampl

As talks between the United States and China aimed at de-escalating their tariff war ended their first day, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl spoke with BBC World News on what American business wants out of the negotiations.

Hampl said the business community wants to see progress on fundamental market-access concerns they face in China, and would be disappointed with more cosmetic takeaways from the talks. But she warned that the Trump administration’s strategy of applying tariff pressure across the entirety of U.S.-China trade could prove counter-productive.

“We see this as a very heavy-handed approach” said Hampl. “We would prefer a more targeted approach to address the underlying issues of IP and forced tech transfer.”

Click here to listen to the full report on the BBC website.