From Minimum CIT To BEPS

Pascal Saint-Amans
Director, OECD Centre for Tax Policy and Administration

IFC Media Interviews Pascal Saint-Amans, Director, Centre for Tax Policy and Administration, OECD.

IFC: There has been concern from some developing countries, where the economy is almost entirely based on the presence of foreign multinationals, that the Pillar Two proposals would reduce tax incentives and thereby make them less competitive. How would you address these concerns?

PSA: Developing countries had a significant influence on the terms of the deal. The agreement acknowledges calls from developing countries for more predictable international rules; provides a redistribution of taxing rights to market jurisdictions based on where sales and users are located, which is often in developing countries; and reduces the incentives for MNEs to shift profits out of developing countries. In addition, the agreement also protects the right of developing countries to tax certain base-eroding payments (like interest and royalties) when they are not taxed up to the minimum rate.

Jurisdiction in Focus

Asia’s Innovative Intermediation Centre

IFC Media Interviews Labuan IBFC.

IFC: In 2020, Labuan IBFC celebrated the 30th anniversary of its inception as a financial hub. What have been the key achievements of the centre over this period?

LIBFC: 2020 marks 30 years since Labuan’s birth as an international wholesale trade, finance, risk and asset intermediation centre. With our unparalleled range of structures and solutions, Labuan IBFC has welcomed more than 16,000 registered companies and more than 1,000 licensed entities in banking, leasing, capital markets, insurance, reinsurance, risk management, digital financial intermediation and wealth management.

Special Focus

Barbados Report 2021

In this special focus, we look at how Barbados has continued to demonstrate resilience, growth and innovation over the past year despite challenges posed by the global pandemic; and we consider the opportunities ahead for the jurisdiction in 2022.

On behalf on Invest Barbados, Derrick Cummins from Amicorp details how Barbados’ global business offerings position the jurisdiction as a world leader in areas such as captive insurance.

We also talk to Marlon E. Yarde, Managing Director of Barbados Stock Exchange Inc., who discusses how the BSE has weathered the pandemic through the development of the BCSDI Custodian Trust Services Inc., which aims to deliver cost-effective and dependable custodian and trustee services to market actors in the financial services industry. 

Are IFCs Collateral Damage?

The Global Minimum Tax And Its Impact

According to an article in the Associated Press earlier this year, between 1985 and 2018 the worldwide average corporate statutory rate of tax fell from 49 per cent to 24 per cent, causing policy makers, including US Treasury Secretary Janet Yellen, to dub this trend “a race to the bottom”.[i]

The same article claimed that from 2000 – 2018, US companies booked half of all foreign profits in just seven low tax jurisdictions - two in the Caribbean.

Seldom has a subject occupied so much space in the financial pages of the international media as the idea of a global minimum corporate tax rate. Equally seldom has a subject been so misinterpreted. Indeed, one wonders: might it be just wishful thinking? The excitement seemed to have reached near a crescendo on 7th June 2021 when the G7 Finance Ministers issued a communique that read in part:

We strongly support the efforts underway through the G20/OECD Inclusive Framework to address the tax challenges arising from globalization…and to adopt a global minimum tax. We commit to reaching an equitable solution on the allocation of taxing rights with market countries awarded taxing rights, on at least 20% of profits exceeding a 10% margin for the largest and most profitable multinational enterprises… We also commit to a global minimum t…


Importing Private Foundations Into The Common Law

Andrew P. Morriss
Bush School of Government & Public Service and School of Law, Texas A&M University

In the last two decades more than 20 common law jurisdictions adopted private foundation laws, introducing the civil law entity into the common law world.[i]

This differs from the migration of legal concepts within the same legal family, as the division between the civilian and common law worlds is often seen as a fundamental difference, one that shapes every aspect of a legal system.[ii] While the two families share a greater degree of common ancestry than is commonly recognised,[iii] there remain significant differences in the roles of judges, statute laws, and precedents, as well as overall legal cultures. The migration of foundations provides an opportunity to test how well civilian legal concepts adjust to the common law environment and raises questions about how the common law versions will differ in practice from their civilian ancestors. I argue that as common law judges are called upon to interpret their jurisdictions’ private foundation statutes, they will bring to the discussion both the common law conception of courts’ roles and the background of common law business entities and trust laws.