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

US / Double tax relief with Taiwan

The US House of Representatives has passed a legislation which includes Taiwan double tax relief. The Senate will now consider and vote on the legislation. While the double tax relief will not have the same status as a tax treaty, US officials have previously called it “treaty-like”.

Spain / Government approves DAC7

The Spanish government has approved the DAC regulations that require qualifying digital platform operators to collect and verify information on sellers using their platform. More specifically, the regulations provide that the platform operators must apply due diligence rules and procedures on the sellers for obtaining and verifying their information, with certain exceptions. The tax authorities will exchange relevant information with the competent authorities of the appropriate EU Member States or "partner States". Click HERE for more information.

Argentina / New interest rates for late payments and reimbursements

The Ministry of Economy has updated the interest rates, now to be updated every 2 months, applicable to late payments and reimbursement of taxes. For example, the monthly interest rate in the case of omitted and late payment of taxes in ARS (article 37 of Law 11,683) will be equivalent to 1.3 times the monthly active rate for non-authorized overdrafts in checking accounts of the Banco de la Nación Argentina in force on the 20th day of the month immediately preceding the beginning of the relevant 2-month period (0.83% if the debt is in USD). The rates will be published on ongoing basis HERE.

Singapore / Update exchange of information list

On 1 February 2024, the Inland Revenue Authority of Singapore (IRAS) published updated lists of participating and reportable jurisdictions for the purpose of the automatic exchange of financial account information under CRS MCAA and Singapore's bilateral automatic exchange agreements. The updated list on “reportable jurisdictions” can be found HERE and the list “participating jurisdictions” HERE.

Fun Tax Fact of the Week

Global minimum tax / Pillar 2 bootcamp

We continue or journey across the GloBe! Last week, we learned about entities excluded from the Pillar 2 rules. This week, we are going to have a look at the charging mechanism which we already touched base on very briefly last week.

As a recap, the GloBE rules aim at ensuring that in-scope MNE Groups pay a minimum tax of 15% on their profits worldwide, irrespective of where they arise. This triggers the question how this is achieved and brings us to the charging mechanism.

Generally, there are two rules to ensure that the top-up taxes are collected. They are called the “Income Inclusion Rule” (IIR) and the “Undertaxed Payments Rule” (UTPR).

The IIR is the main rule. It foresees that the parent entity of a low-taxed constituent entity (see our previous newsletter in case you forgot what a CE is) should be the top-up tax for its low-taxed CE, i.e. the top-up tax is not due in the low-taxed jurisdiction but in the parent entity’s jurisdiction (even if that jurisdiction is high-tax). It works as a top to bottom rule. As such, one will need to start at the level of the ultimate parent entity (“UPE”) of the MNE Group (come back next week to learn more about the UPE). If the UPE does not apply the IIR (because the country in which it is resident has not implemented it), one would then need to work down the corporate chain to identify the next parent entity which applies the IIR.

The second rule is the UTPR. It is designed to act as a backstop rule and will only apply if it is not possible to recover all of the MNE’s share of the top-up tax allocated under the IIR. For example, this would be the case if there was no parent entity of the low-taxed entity applying the IIR.

Leadership principles for top managers at Big Multi Inc. 🏢

Rule #5 - Look at stand-up comedians

Last week we learned that humor might be one of the most or maybe even the most important trait a leader should have. This got us thinking: might comedians then be the best leaders?

while we haven’t found an answer obviously to this question , we stumbled upon an interesting article about what else - besides humor - leaders can learn from comedians, more precisely stand-up comedians.

You can read the full article here but in brief:

• Start strong: get people on your side early on

• Deliver with confidence: if you are not confident people may have a hard time following you

• Seek feedback: Ask for 360 degree feedback

• Give credit: give your team the recognition it deserves

• Respect others’ time: for example, do not consistently turn up late for meetings

What do you think about these?

Tax Roast of the week

Invite the crew for a coffee☕

We never say no to a good cup of coffee! So, if you loved this edition and you would like to support us, you can invite our crew for a cup of coffee here.

Coffee corner

Last time we briefly discussed the two main types of coffee: arabica and robusta. Let's speak a little bit more about the less known or less popular one: the robusta. 

Why is it considered less popular? Why are most coffee lovers looking for pure arabica blends?  Is it really inferior to arabica? Most likely the answers can be found in the taste and aroma of the robusta coffee beans. Compared to arabica beans, robusta coffee beans have a bitter and kind of less aromatic taste. This can be attributed to their significantly higher caffeine content as they contain approx. twice as much caffeine. (But when a coffee lover wants to kick off the day, this factor does matter!) The robust and stronger taste make it an excellent contributor in various coffee blends when mixing them with arabica. It is less known by average coffee drinkers that robusta coffee shows less acidity than the arabica. So if you love strong, less acid but robust coffee taste go for a robusta shot (espresso or doppio).

You can also buy excellent robusta beans too (maybe not at your regular grocery shop at the corner of your block), and try to create your own blend at home to boost your morning brew. 

If you love espresso, you have probably realized already that the global brands typically blend robusta to arabica in their espresso sortiments. One reason is the caffeine content, another one is the bitterness, but the third (and equally important) one is that robusta can produce a nicer, better textured, more consistent and longer lasting crema on the top of an espresso.

Enjoy your morning coffee!

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