Leonard's Tax Posts

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  • Countries need to show: How Deep Is Your Love? (for the global billionaire tax)

    Originally published: May 2024 The global billionaire tax as proposed by Gabriel Zucman (https://lnkd.in/e98cPCjZ https://lnkd.in/eRpErDXu) has support from a lot of countries (Brazil, France, Germany, Spain, Netherlands), but it’s not clear how deep their love for the proposal is. Once the idea starts being taken seriously, there’ll be pressure from global politics, tax technical challenges… Continue reading

  • Arm’s length principle under Pillar 2: It’s Only A Paper Moon

    Originally published: May 2023 Under article 3.2.3 of the GloBE Model rules (Pillar 2, P2), cross border transactions within an MNE Group should be corrected to arm’s length prices (a clause which immediately looked curious https://lnkd.in/gnFttZxR and which continues to trigger discussion https://lnkd.in/gtmCTuxw)). But then the commentary on the GloBE rules essentially drops this principle… Continue reading

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  • 100 Rock songs about taxes

    Originally published: April 2024 Last year, I made a playlist exploring tax references in hip hop which highlighted hip hop’s many facetted attitudes to tax (https://www.linkedin.com/pulse/tax-hip-hop-1973-2023-leonard-wagenaar/). Why stop there? This month, I dug into rock music history (helped in part by this great podcast: https://500songs.com/). With a bit of research, I now have a playlist… Continue reading

  • April 2024: 100 Rock songs about taxes

    Originally published: April 2024 This April, Beyoncé turned country, Taylor Swift turned back to pop and I turned rock. Rock music might not be an obvious fit for tax technical points, but like any big body of work, there’s plenty of tax references throughout rock music’s long history. More on that below. Let’s deal with… Continue reading

  • 200 Rock songs about taxes

    Blog post only Tax lines in rock songs Last year, I made a playlist exploring tax references in hip hop which highlighted hip hop’s many facetted attitudes to tax (https://www.linkedin.com/pulse/tax-hip-hop-1973-2023-leonard-wagenaar/). Why stop there? This month, I dug into rock music history (helped in part by this great podcast: https://500songs.com/). With a bit of research, I… Continue reading

  • Does Shōgun overcome the problems in its source materials?

    Blog post only Like many people, I thoroughly enjoyed the Disney + series Shōgun, even if (and maybe because) it continuously makes the viewer uncomfortable. Period pieces showing intercultural exchange have a long history of creating orientalist pulp and though James Clavell’s underlying novel is far from the worst of it, it doesn’t fully escape… Continue reading

  • Ball Of Confusions (That’s What The Tax World Is Today)

    Originally published: April 2024 In their epic 1970 track Ball Of Confusion (That’s What The World Is Today), the Temptations sing “politicians say more taxes will solve everything” (https://lnkd.in/ev9UJN8d). Tax rises remain unpopular, but the thought of new taxes and new sources of income appeals to politicians. As government deficits keep growing and the low interest… Continue reading

  • 10,000 Maniacs

    Originally published: April 2024 How big is the market for quirky international tax stories interlaced with pop culture references (usually music)? When I reached 5,000 followers January last year (https://lnkd.in/gKC6WZq3), I thought that was pretty much the maximum. But I kept going, and even though I’ve now dialed back quite a bit (https://lnkd.in/eueNV9Wm), it seems… Continue reading

  • Is the global minimum tax “never going to be Respectable”?

    Originally published: April 2024 In 1987, Mel & Kim did a song called Respectable (https://lnkd.in/euSWanvv), in which they vowed that they were never going to be respectable. The lyrics sound quite tame. The point that Mel & Kim missed is that being “respectable” is not so much about what you do, but what the world… Continue reading

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  • Gabriel Zucman would Love To Change The World

    Published: April 2024 In February, Gabriel Zucman outlined his proposal for a global minimum tax for individuals at the G20 summit in São Paulo, which was eagerly supported by Brazil and France (https://lnkd.in/eCy4HA8r https://lnkd.in/e7FCmjc3). A more detailed proposal has been commissioned. Though this development is frequently mentioned, no one seems to talk about how ground-breaking… Continue reading

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  • Taxpayer’s defence against a purpose test: It Never Entered My Mind

    Originally published: April 2024 Last week, the UK court of appeal (CoA) issued a highly anticipated verdict in the Blackrock Holdco 5, LLC case on UK interest deduction rules (https://lnkd.in/eEFBCC6Z). For a discussion of the upper tribunal (UT) judgement, see here https://lnkd.in/enZgctmM. In this case, a UK resident company (LLC 5) took out a shareholder… Continue reading

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  • EY’s GloBE Engine: Global Minimum Tax management tool

    Originally published: April 2024 OECD’s Pillar 2 (P2) GloBE rules are hitting many businesses and impact assessment, financial reporting and compliance is a struggle. P2 requires hundreds of data points per entity, often data that is not readily available. So what you really want is a solution that takes the data in whatever format it… Continue reading

  • Today’s International Tax Challenges: I Know There’s An Answer

    Originally published: April 2024 The central role of the arm’s length principle (ALP) in international tax has always had its critics, but as ALP grew in importance, the critique also seems to swell up. ALP increasingly depends on human “functions, assets, risks” (FAR), but as I explained earlier this year (https://lnkd.in/gWJPt95s), new business realities put… Continue reading

  • All Or Nothing At All?

    How much do transactions matter to transfer pricing (TP)? There are two opposing schools of thought, saying they either mean either all or nothing at all (https://lnkd.in/eaUu-r8E). The first school of thought says TP is pricing transactions and correct the pricing if they are not at arms length. As you test the transactions, the transactions… Continue reading

  • Losing Your Favourite Game

    Originally published: April 2024 MNEs are taxed on an entity-by-entity basis and they allocate their profits to different entities primarily on the basis of the arm’s length principle (ALP), which requires a complicated transfer pricing (TP) analysis on any transactions within the MNE group. Tax justice activists generally dislike ALP, as they see it as… Continue reading

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  • March 2024: an Afghan pop music history (1997-now)

    As the end of March coincides with the Easter break, we will close off this month slightly early. More on that later. Let’s first talk tax. Top posts: News: Tax technical sideroads: Music: With the start of Ramadan, New Years and now Easter, it seems all holidays come at the same time this year. The… Continue reading

  • Group companies don’t act at arm’s length in times of need

    Originally published: March 2024 Tax rules generally split profits between entities based on the the arm’s length principle (ALP). But group companies support each other in official and unofficial ways. If a group company guarantees a loan, boosting the creditworthiness is a service with an ALP supported guarantee fee. But banks can offer lower interest… Continue reading

  • It Ain’t Necessarily So: ordinary, necessary, wholly and exclusive business expenses

    Blog post only When tax policy makers draft a rule allowing for deduction of expenses, they tend to get very nervous. After all, they don’t want to be too lenient in allowing deductions. So they often come up with a strict rule that tests the expenses. The US only allows for deduction of expenses that… Continue reading

  • UN Proposal on 12A UN MC showcases UN tax dynamics

    Originally published: March 2024 The UN Tax Committee will hold its 28th session today (https://lnkd.in/exJ7aD8Zhttps://lnkd.in/eixQNxTu). This committee is in charge of the UN Model Tax Convention (UN MC). Although this committee does not cover the hotly debated new general UN Tax Convention, the dynamics showcase how tax cooperation at the UN looks like. On the… Continue reading

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  • Dreams are my reality: Key pointers for writing corporate policies

    Blog post only If you are ever tasked with writing a corporate policy, your instincts might lead you to include a lot of pointless narratives on how certain rules work and why policy is important. Or, if you understand a little bit better what the policy is intended to do, you might end up describing… Continue reading

  • If you are out of Amount B, you can let go a sigh of relief

    Originally published: March 2024 A transfer pricing (TP) specialist recently told me: “if you do the analysis and conclude you’re not in scope of Amount B, you can let go a sigh of relief”. Many saw the potential for TP simplification in Amount B as promising. But the mood has shifted, especially after last month’s… Continue reading

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  • Dutch political parties say “Roll Over Beethoven”

    Blog post only If you follow a few people who are tax advisers on LinkedIn, you are probably familiar with their complaints about the deteriorating Dutch “investment climate”. The tax and regulatory regime keeps on getting less favourable for businesses. Unilever and Shell have already moved their headquarters out of the Netherlands. Boskalis is thinking… Continue reading

  • Can You Keep Up?

    Originally published: March 2024 When in-house tax professionals think about the long term, two of their most common questions are (1) will technological disruption (such as AI) mean that there will be less tax jobs in the future and (2) how will we be able to cope with ever increasing data required by tax authorities?… Continue reading

  • UNCTAD report on DTTs: Tapping On The Line

    Blog post only Last month, UNCTAD released a guide for policy makers on the tax policy questions involved in decisions to conclude and negotiate a double tax treaty (DTT). Like other UNCTAD publications, it is well written and balanced, though this one is a little more high level than some of the other deep dives… Continue reading

  • Tackling corporate tax avoidance by taxing individuals in residence states

    Originally published: March 2024 There are long standing international tax debates on transfer pricing (TP), allocation of taxing rights, tax competition, tax avoidance, profit shifting, treaty shopping, tax residency and a host of other issues. If we abolish CIT (or very much lower rates), all these issues would disappear. That’s the core of Savvas Kostikidis’s… Continue reading

  • Immanuel Kant and amoral AI judges

    Blog post only Outsiders to think that tax law, like any law, is rule based work and therefore a sector where AI could do very well. Legal specialists know that this misrepresents a lot of the work. Yes, law is rule based, but there is a certain finesse attached to it, that is very non-mechanical.… Continue reading

  • Are QRTCs the Fatal Flaw of Pillar Two?

    Originally published: March 2024 It’s become common to criticize Pillar 2 (P2) for its treatment of Qualified Refundable Tax Credits (QRTCs). Many P2 critics claim that countries will a QDMTT and then take that revenue to hand out QRTCs, effectively shifting to another form of tax competition. The Tax Foundation calls this P2’s fatal flaw… Continue reading

  • Why did most non-English music traditions fall into decline after the 70s before recovering in the early 21st century?

    Blog post only In yesterday’s playlist for February 2024, I explored how Brazilian music from the 40s-70s often used natural metaphors to cover changes in life. Of course, this is not a unique Brazilian phenomenon, as some of the best lines in English do that too (“Into Each Life, Some Rain Must Fall” say the… Continue reading

  • February 2024: MPB Classics about the weather, the seasons and the elements

    Originally published: February 2024 Happy 29 February! It only happens every 4 years. It also the end of the month. Here is what happened in the tax world in February 2024. Top posts: News: Tax technical sideroads: Music: like most outsiders, I first learned about Brazilian music through bossa nova. But Brazilian music c. 50… Continue reading

  • Sad But True: “Nothing Else” matters in Australian restructuring relief case

    Blog post only Sad but true: Andy Bubb wrote about an Australian tax case on LinkedIn where an Australian taxpayer is forced to apply rollover relief as the restructuring just put a new holding company on top of the existing structure and “nothing else”. So, Andy concludes that Metallica was right all these years and… Continue reading

  • Register for Global Minimum Tax IFRS accounting and reporting webcast

    Originally published: February 2024 You’ve read all the Pillar 2 stories and I know you have just one question you care about: what do I write in my accounts? Luckily for you, there is a webcast tomorrow (https://lnkd.in/gSRr2b2F) that will give all the answers. Except if you apply an accounting standard other than IFRS. In… Continue reading

  • Total football and TP

    Originally published: February 2024 In the 1970s, Dutch teams revolutionised the sport of football through a tactic known as “total football” (https://lnkd.in/gUZ_W7hD). Previously, teams let their players play on fixed positions, except defenders which often played man marking. But under “total football”, players would roam around the field exploring opportunities where they arose, luring away… Continue reading

  • Career advice: Be a Smooth Operator and be “in” with the In-Crowd

    Blog post only Just like any other business, tax advice is a business driven mostly by unit economics. You need to sell something (tax advice) for more than its cost (salaries). You can increase competitiveness and profitability, if you can standardise and scale to create a recurring money making machine. If you are starting off… Continue reading

  • An International Tax Research Agenda

    Originally published: February 2024 Quite often, tax technical articles analyse tax topics as a specific technical problems, while losing sight on how that problem fits into a larger story. But most technical problems are related and connected to fundamental design questions of how international tax is meant to work. So, I can only applaud that Aitor… Continue reading

  • Bold International Tax Reforms to Counteract the OECD Global Tax

    Blog post only Libertarian leaning think tank the Cato Institute published a tax policy paper with some bold claims and some bold plans for US tax reforms (https://www.cato.org/policy-analysis/bold-international-tax-reforms-counteract-oecd-global-tax). The starting point of the paper is that CIT is harmful for investment and the world economy. CIT is also portrayed as overly complex as compared to… Continue reading

  • PE Watch 2023: Year In Review

    Originally published: February 2024 EY’s market leading PE Watch: 2023 in review is out (also available here: https://lnkd.in/eRMJv5jK) and I am happy to announce that I penned the section on how 2023 treated the difficult issue of remote work PEs. Scroll quickly to Section 2 to find out more. I end on a hopeful note that… Continue reading

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  • The Arm’s Length Standard and Tax Justice

    Originally published: February 2024 In the last season of Mad Men, Don Draper finally ends up at a big advertising firm. He joins a meeting to discuss a Coca Cola ad pitch with 30 or so other advertising gurus. Draper looks around wondering how his work could have any discernible impact. He gets up and… Continue reading

  • OECD: Stuck In The Middle With You

    Blog post only Last week, I described the OECD’s position as “Shot By Both Sides” (https://taxleonard.wordpress.com/2024/02/09/oecd-shot-by-both-sides/). This referred to OECD’s work being under vehement attacks from both Republicans in the US and some developing countries and tax activists. A casual observer might think that these attackers have much in common, but I tried to show… Continue reading

  • OECD: Shot By Both Sides

    Originally published: February 2024 The OECD has been the leading organisation for international tax for as long as people can remember. Its role grew as it took on the BEPS project and then the Two Pillars. The Two Pillars sought to resolve long-standing conflicts on the allocation of tax base on topics where the world’s… Continue reading

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  • Orientalism in Gilbert & Sullivan’s the Mikado

    Blog post only I obviously can’t let discussion on orientalism in classical operas go by and not mention Gilbert & Sullivan’s the Mikado (1885). There’s so many things going on here that I don’t know where to start. Performances usually involve white characters playing Japanese (just look at the cover of the album linked below),… Continue reading

  • Classic Classical Music from the Classical Period

    Blog post only A few months ago, my continuous musical exploration brought me to classical music from the classical period (roughly 1750-1800). This was the time where the greats like Mozart and Beethoven were composing. It is probably the most central and most foundational part in the history of classical music (hence, why it’s called… Continue reading

  • Work From Home

    Originally published: February 2024 If someone works from a home office in a different country than their employer, can that trigger a permanent establishment (PE) subjecting the employer is to corporate tax? I’ve written on this countless times (see here: https://lnkd.in/em6mvyxX) and it’s a grey zone. Some people would really like such working arrangement, but given… Continue reading

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  • Orientalism in Puccini’s Madame Butterfly

    Blog post only Following on my post from yesterday, I decided to look at another opera that details interaction between Europeans and non-Europeans and see how well it survives the test of time. So, I turn to the seminal Giacomo Puccini opera: Madame Butterfly (1904): Madama Butterfly – Wikipedia. Madame Butterfly details the story of… Continue reading

  • Orientalism in Rossini’s Tancredi

    Blog post only Whenever I come across an old work of art, I like to see how the story and the morale stacks up in today’s world. This is especially true when the story shows Europeans interacting with foreign cultures. So I came across Gioachino Rossini’s Tancredi (1813), set in and around 11th century Syracuse,… Continue reading

  • January 2024: Hip Hop Means Business

    Originally published: January 2024 I’ll continue with monthly overviews for now, as it gives me an excuse to pivot tax discussions to music. But to build up numbers, the links here aren’t strictly my LI posts. So this was January. Top posts:– I will be posting less on LI (https://lnkd.in/eueNV9Wm)– How a DD call could… Continue reading

  • Dutch case law clarifies Beneficial Owner (somewhat)

    Originally published: January 2024 Last week, the Dutch Supreme Court (SC) ruled on the application of the Dutch dividend stripping specific anti abuse rules (SAAR) (https://lnkd.in/eUBtRxWG). The judgement clarifies the role of the SAAR, but it’s probably of wider interest when it touched on the meaning of ‘beneficial ownership’ (BO). To set the scene: the… Continue reading

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  • DD call gone bad

    Originally published: January 2024 In a due diligence (DD) process, the adviser tries to find out problems with a business, mostly by asking management. Management knows the business intimately, but they have an interest for the business to look good, creating an obvious conflict of interest. You might think it’s a good idea to put… Continue reading

  • Hypocrisy and confusion distort the debate on social mobility

    Blog post only If you think the public debate on taxes often misses some of the points, you should pay attention to debates on migration and social mobility. Those discussions tap into people’s fears and aspirations, but routinely miss the real economic undercurrents. This Martin Wolf column from 2019 (Hypocrisy and confusion distort the debate… Continue reading

  • Pavic’s Dictionary of Khazars

    Blog post only The Dictionary of Khazars (Dictionary of the Khazars – Wikipedia) is a ‘lexicon novel’ by Milorad Pavić, detailing a fictional account of what happened to the Khazar empire (a Jewish empire in the 6th century on the banks of the Caspian Sea that suddenly disappeared without a clear historical explanation (Khazars –… Continue reading

  • BEPS 2.0 and Pillar Two implementation developments

    Originally published: January 2024 Next week, there’ll be a webcast that can update you on the current status of implementation of Pillar 2 (https://lnkd.in/efiavp-P). Now that it’s 2024, Pillar 2 has entered into force in a lot of jurisdictions. I expect the webcast will talk about implementation in the EU (almost all done, although (1)… Continue reading

About Me

I am Leonard, an experienced M&A Tax and International Tax expert. I write about tax on LinkedIn and Twitter sometimes (but mostly LinkedIn). People liked the posts, but there were too many of them to keep track of. So, now they are on a blog for future reference.

Obvious disclaimers on all my posts: this is not advice. These views are my own and do not necessarily represent my employer.

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LinkedIn profile: https://www.linkedin.com/in/leendertwagenaar/

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