Other news in brief

On 9 September 2022, the Governments of France, Germany, Italy, Spain and the Netherlands issued a joint statement expressing their full commitment to implementing the Pillar Two Global Anti-Base Erosion Rules which provide for a global minimum tax. According to the statement, their primary goal remains a consensus at an EU level, but if unanimity is not reached in the coming weeks, they say they are ready to implement the rules by “any possible legal means”. So far the Economic and Financial Affairs Council of the EU has failed to reach a political agreement on the revised compromise text. Read more in a recent KPMG International TaxNewsFlash.

A public consultation meeting on Amount A of Pillar One took place on 12 September 2022. In the meeting, the OECD discussed public comments on the ‘Progress Report’ for a reallocated taxing right that will allow market jurisdictions to tax profits from some of the largest multinational enterprises. A recording of the meeting is available on the OECD website.

Brazil and the UK have published a joint declaration announcing the start of the first round of negotiations on a new Brazil-UK Double Tax Treaty (DTT). The negotiations began during a visit by HMRC to Brazil between 12 and 16 September 2022. A Brazil-UK DTT has been a consistent ask of businesses in both the UK and Brazil, but before negotiations could start, there had to be a realistic prospect of being able to agree a treaty and Brazil’s position on source state taxing rights on gross fees for technical services (which is non-OECD Model aligned) had been a fundamental sticking point. According to the declaration, signing a DTT will contribute to increased cross-border trade and investment, long-term certainty and stability for businesses, and the enhancement of bilateral relations. This latest announcement follows recent progress made by Brazil towards OECD accession including alignment with OECD transfer pricing standards – read more in our previous Tax Matters Digest article.

The Scottish Government has published its legislative programme for the year ahead. This includes Bills for a Local Visitor Levy (LVL) and a Scottish Aggregates Levy (SAL). If enacted, the LVL Bill would give local authorities the power to apply a levy on overnight stays in visitor accommodation, should they choose to do so. Proceeds of the levy would fund local services. The SAL Bill will, if enacted, implement the devolution of power to tax the commercial exploitation of aggregates provided for by the Scotland Act 2016. The SAL would replace the UK Aggregates Levy in Scotland and be administered by Revenue Scotland. Both new taxes are expected to apply from 2026.