Greetings and Happy Tuesday! This is Tax Roast, a weekly newsletter that brings you the latest updates and insights from the international tax world from tax experts (and coffee enthusiast) who are walking the tax advisory path.

And do not forget to check out our coffee of the week, because there is no tax news without a good cup of coffee :)

International Tax Update

United States / Biden announces tax changes

In his State of the Union speech on 7 March 2024, President Joe Biden proposed various tax proposals that he plans implement in his final year as US President as the US heads towards a general election later this year in November. Amongst others, Biden proposed to increase the corporate minimum tax from 15% to 21% as well as introduce a premium tax credit.

Click HERE for more information.

Belgium / Government proposes changes to Pillar 2 rules

Pillar 2 has only been “live” for two months and Belgium already thinks about changes. On 6 March 2023, the government thus submitted a bill on changes to the minimum tax to the parliament. The proposed changes to the minimum tax include inter alia allowing the transfer of tax credits to a non-related company but only if the transferred amount exceeds 80% of the net present value as well as a provision under which a group entity can decide not to exclude dividends on a shareholding, voting or profit right of less than 10%.

Trinidad & Tobago/ CbCR becomes reality

On 6 March 2024, the House of Representatives approved the Base Erosion and Profit-Shifting (BEPS) Inclusive Framework (Country-by-Country) Reporting Bill 2023, which seeks to provide country-by-country reporting (CBCR) legislation to meet the jurisdiction's obligations to the BEPS Inclusive Framework.

Thailand / Next step in Pillar 2 implementation

Thailand’s Revenue Department has published the principles of a draft law to support a global minimum tax based on the Pillar Two Global Anti-Base Erosion (GloBE) Model Rules and invited stakeholders to provide their input by 15 March 2024.

The public consultation follows the Cabinet’s approval in March last year of measures to support a global minimum tax under the Pillar Two rules, which would require multinational groups with revenues of at least EUR 750 million to pay income tax at an effective tax rate of not less than 15 percent. More information can be found HERE.

Fun Tax Fact of the Week

Global minimum tax / Pillar 2 bootcamp

This week we will talk about the substance based income exclusion in general, and the next week we will dive deep into the details around this rule. But first, let’s see what this rules is all about.

The provision known as the substance carve-out serves to exclude a specific portion of income from the tax base of the Global Anti-Base Erosion (GloBE) regime. This exclusion is determined by calculating a fixed return on assets and payroll expenses within each jurisdiction. The substance-based income exclusion is determined by adding together two components: (i) 5% of the carrying value of tangible assets situated within the jurisdiction, and (ii) 5% of the payroll costs associated with employees engaged in activities within the jurisdiction.

In addition, the GloBE rules incorporate a transition period lasting for a duration of 10 years. This transition period is designed to acknowledge the potential impact of the GloBE rules on existing incentives and investments. Initially, the transition period commences with a 10% carve-out for payroll costs and an 8% carve-out for tangible assets. Over time, these carve-out percentages gradually decrease to 5%.

The inclusion of a substance carve-out based on assets and payroll costs enables a jurisdiction to maintain its ability to offer tax incentives that reduce the tax burden on routine returns derived from substantive activities. Importantly, this does not trigger any additional GloBE top-up tax. Given that the carve-out encompasses both tangible assets and payroll, its application extends across a wide range of industries.

Leadership principles for top managers at Big Multi Inc. 🏢

Rule #9 - How to integrate a new person into your team?

Dealing with new recruits can be painful not only for them but for you as a manager too! You don’t really know what to expect from the person and of course everyone expects to be treated differently. But don’t you worry, we have the ultimate guide on how to integrate a new person into your team.

First things first, make sure to completely ignore the fact that this person is new and has no idea what they're doing. Don't bother assigning them a mentor or providing any sort of training. Just throw them into the deep end and let them figure it out on their own. After all, who needs a smooth transition when you can have chaos and confusion?

Next, be sure to exclude the new person from any team activities or meetings. It's important to make them feel like an outsider right from the start. Don't bother introducing them to anyone or explaining the team dynamics. Let them fend for themselves and try to navigate the office politics without any guidance. It's a great way to build resilience, right?

And finally, make sure to give the new person all the most challenging and high-pressure tasks right away. Forget about easing them into their role and gradually increasing their responsibilities. Throw them into the fire and see if they can handle it. Who needs a supportive and nurturing environment when you can just test their limits and see if they crack under the pressure? It's the best way to weed out the weaklings and separate the wheat from the chaff. 

Tax Roast of the week

Invite the crew for a coffee☕

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Coffee corner

This week, we talk about the best way (we know) to prepare the milk frothing to your delicious cappuccino. To achieve the best milk frothing for a cappuccino, it is important to start with cold milk. Cold milk creates a better texture and allows for more control during the frothing process. Fill the milk pitcher with the desired amount of milk, ensuring not to overfill it as the milk expands when frothed.

Next, purge the steam wand by turning it on for a few seconds to release any residual water. Position the steam wand just below the surface of the milk, slightly off-center. Turn on the steam and gradually lower the pitcher until the steam wand is fully submerged. The steam should create a gentle swirling motion in the milk. As the milk expands, continue to lower the pitcher to maintain the steam wand just below the surface.

Once the milk reaches the desired temperature, turn off the steam and remove the pitcher from the steam wand. Gently tap the pitcher on the counter to remove any large bubbles and swirl the milk to incorporate the foam. Pour the frothed milk into the espresso, holding back the foam with a spoon until the last moment to create the classic cappuccino layered effect. With these steps, you can achieve perfectly frothed milk for a delicious cappuccino.

Enjoy your morning coffee!

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