Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Policy paper: Capital Goods Scheme simplification
The UK government has published a policy paper on simplifying the Capital Goods Scheme (CGS), a VAT mechanism that requires businesses to adjust input tax recovery on certain high-value capital assets over a period of years as their use changes. The simplification proposals aim to reduce administrative burdens on businesses by streamlining the adjustment calculations and record-keeping requirements associated with the CGS. This is relevant to UK VAT-registered businesses holding qualifying capital assets such as land, buildings, and computer equipment.
Submit your Soft Drinks Industry Levy return
HMRC has issued guidance on submitting returns under the UK's Soft Drinks Industry Levy (SDIL), a sector-specific tax on producers and importers of sugar-sweetened beverages. The guidance covers the process for completing and filing SDIL returns, including reporting volumes of liable drinks, calculating the levy due, and meeting submission deadlines. The SDIL applies at different rates depending on sugar content, and compliance with return obligations is mandatory for businesses that manufacture or import soft drinks in the UK.
PIAF for continuation of remittance incentives for sustained forex inflows
The Pakistan Industrial and Farmers Association (PIAF) has called for the continuation of remittance incentive schemes to sustain foreign exchange inflows into Pakistan. The association argues that tax and financial incentives for overseas Pakistanis sending remittances are critical for stabilizing the country's forex reserves and supporting economic growth. PIAF's advocacy focuses on maintaining preferential tax treatment and financial benefits tied to formal remittance channels, highlighting the intersection of tax policy and foreign currency inflow strategies as Pakistan seeks to bolster its balance of payments position.
Feds to Decide Fate of California’s $2 Billion Plan to Tax Health Insurers to Fund Medi-Cal
Federal authorities are reviewing California's proposal to impose a $2 billion tax on health insurers to fund the Medi-Cal program, the state's Medicaid system. The plan involves a provider tax mechanism that requires federal approval to qualify for matching funds. California relies on this insurer tax structure to draw down federal Medicaid dollars, making federal sign-off critical. The outcome will determine whether the state can sustain its expanded Medi-Cal coverage without significant budget cuts. This represents a significant state-level tax policy decision with major implications for healthcare funding and insurance sector taxation in California.
Instead of Uniting the Left, California’s Billionaire Tax Measure Has Split Democratic Allies
A California ballot measure proposing a wealth tax targeting billionaires has created divisions among Democratic allies rather than unifying the left. The measure aims to impose additional taxes on ultra-high-net-worth individuals in California, but disagreements over its design, economic impact, and feasibility have fractured progressive coalitions. Critics within the Democratic Party argue it could drive wealthy residents out of state, while supporters see it as essential for addressing inequality and funding public services. The political rift highlights broader tensions around wealth taxation strategies at the state level in the United States.
Child Care Tax Credit for New Hampshire Biz Becomes a Reality
New Hampshire has enacted a child care tax credit for businesses, making it law after legislative approval. The credit is designed to incentivize employers to invest in child care solutions for their employees, addressing workforce participation barriers. Businesses that contribute to employee child care costs or establish on-site facilities can claim the credit against their state tax liability. The measure reflects a growing trend of states using tax incentives to tackle child care affordability and labor supply challenges. New Hampshire joins other states leveraging the tax code to support working families and business competitiveness.
Rauh & Jaros: It Failed in France. It Would Be a Disaster in California.
This article by Rauh and Jaros analyzes a wealth tax proposal in California, drawing comparisons to France's experience with a similar levy that was ultimately repealed after producing capital flight and disappointing revenue. The authors argue that a California wealth tax would similarly fail, potentially driving high-net-worth residents and businesses out of the state, undermining the broader tax base. The piece engages substantively with tax policy design, behavioral responses to wealth taxation, and lessons from international experience, making it a genuine contribution to the debate over progressive personal income tax and wealth tax policy.
Domestic Revenue Mobilisation Must Take Centre Stage in Africa’s Development Agenda
The African Tax Administration Forum (ATAF) highlights the critical need for domestic revenue mobilisation (DRM) to drive Africa's development agenda, reducing dependence on foreign aid and external debt. The piece argues that strengthening tax systems, broadening tax bases, and improving tax administration across African nations are essential for sustainable financing of public services and infrastructure. With aid flows under pressure globally, African governments must prioritise building robust, efficient revenue collection frameworks. ATAF calls for coordinated regional efforts, capacity building, and policy reforms to enhance compliance and close tax gaps across the continent.
Democratic Senators Probe Scope of Trump’s IRS Immunity Deal
Democratic senators are investigating the scope of a reported IRS immunity deal under the Trump administration, raising concerns about whether certain individuals or entities are being shielded from federal tax enforcement actions. The probe focuses on the extent of any agreements that may limit the IRS's ability to pursue tax compliance and enforcement against specific parties. This represents a significant tax controversy and oversight issue, with implications for the integrity of federal tax administration and the independence of the IRS as an enforcement body.
SRB achieves record Rs370.06b revenue in FY2025-26 with 20.17pc growth
The Sindh Revenue Board (SRB) achieved a record revenue collection of Rs370.06 billion in FY2025-26, representing a 20.17% growth over the previous fiscal year. This milestone reflects strong performance in provincial tax administration in Pakistan's Sindh province. The SRB oversees sales tax on services, and this record collection signals improved compliance, broadened tax base, and enhanced enforcement measures. The result underscores Pakistan's ongoing efforts to boost subnational revenue mobilization amid fiscal pressures, with the SRB emerging as a key contributor to provincial finances.
What if Andy Burnham lowered the mansion tax threshold to £1.5m?
An analysis exploring the potential revenue and distributional impacts of lowering Andy Burnham's proposed mansion tax threshold from £2 million to £1.5 million. The piece examines how a reduced threshold would broaden the tax base, capturing more high-value properties in Greater Manchester and potentially across England. It considers the number of additional properties that would fall within scope, estimated revenue implications, and political feasibility. The analysis likely draws on property price data and compares outcomes at different threshold levels, contributing to the broader debate on wealth taxation and property levies in the UK.
The Structured Installment Sale: What CPAs Should Be Telling Business and Real Estate Clients Before They Close
This article advises CPAs on structured installment sales as a tax-efficient strategy for business and real estate clients prior to closing a transaction. Unlike traditional installment sales, structured installment sales involve assigning future payment rights to a third-party assignee, potentially deferring capital gains tax obligations over an extended period. The piece outlines key benefits including tax deferral, income smoothing, and estate planning advantages. CPAs are encouraged to introduce this option early in deal negotiations to maximize client outcomes, particularly for high-value transactions where immediate capital gains recognition could result in significant tax liability.
After IEEPA: Which tariff authorities does the U.S. government still have — and what global manufacturers need to know
This article analyzes the U.S. tariff legal landscape following challenges to IEEPA-based tariff authorities, outlining which statutory powers the U.S. government retains to impose duties. It covers alternative authorities including Section 232, Section 301, and the Trade Act provisions still available to policymakers. Global manufacturers are advised to reassess supply chain strategies given the remaining legal tools for tariff imposition. The piece provides a framework for understanding the durability of existing tariffs and the risk of new measures, helping businesses anticipate trade policy shifts and maintain compliance under a complex and evolving U.S. trade authority structure.
Connecticut discusses conformity to federal research, experimental expenditures
Connecticut is considering conformity to federal tax treatment of research and experimental (R&E) expenditures. Under the Tax Cuts and Jobs Act, federal rules changed to require capitalization and amortization of R&E costs rather than immediate expensing, effective from 2022. Connecticut's deliberations center on whether the state will adopt these federal changes, which significantly affect businesses claiming R&E deductions at the state level. Conformity decisions impact how companies calculate their Connecticut taxable income, with potential implications for tax liabilities of businesses engaged in research activities operating within the state.
The Impact of Section 174A on Taxpayers: Opportunities and Ongoing Challenges
Section 174A introduces significant changes to the tax treatment of research and experimental (R&E) expenditures for U.S. taxpayers. The provision affects how businesses capitalize and amortize R&E costs, replacing prior immediate expensing rules. Taxpayers face both planning opportunities—such as optimizing amortization schedules and leveraging related credits—and ongoing challenges including complexity in identifying qualifying expenditures, software development cost treatment, and contract research allocations. The article explores strategic responses for affected businesses navigating compliance under the new framework, highlighting areas where IRS guidance remains incomplete and where taxpayers must make difficult interpretive judgments.
Thorndike: The Forgotten Ancestor of AI Taxes
This article by Thorndike explores the historical origins of taxes on artificial intelligence, examining early precedents and policy thinking that anticipated modern debates around taxing AI systems and automated labor. The piece traces how earlier generations grappled with taxing new technologies and automation, providing historical context for contemporary discussions about digital services taxes, robot taxes, and AI-specific levies. Understanding these forgotten ancestors of AI taxation offers valuable perspective for policymakers currently designing frameworks to capture revenue from AI-driven economic activity and address displacement concerns associated with automation.
Trump Accounts Risk Missing Low-Income Families Buying In
Trump Accounts, proposed savings vehicles in recent U.S. tax legislation, risk failing to reach low-income families who may lack the financial resources or awareness to participate. The accounts offer tax-advantaged savings opportunities, but critics argue the structure and access barriers mean benefits will disproportionately flow to higher-income households. Without targeted outreach, matching contributions, or simplified enrollment mechanisms, the policy goal of broad-based wealth-building could fall short, echoing concerns raised about similar past initiatives like Health Savings Accounts that skewed toward wealthier participants.
UK Flat Rate Scheme Under Review
The UK's Flat Rate Scheme (FRS), which allows small businesses to pay a fixed percentage of turnover as VAT rather than accounting for VAT on individual transactions, is under review. HMRC is examining whether the scheme remains fit for purpose, potentially considering changes to eligibility thresholds, sector-specific rates, or the scheme's overall structure. The review reflects broader efforts to simplify VAT compliance for small businesses while ensuring the scheme is not exploited for unintended tax advantages. Businesses currently using or considering the FRS should monitor developments closely as reforms could materially affect their VAT liability and administrative burden.
Simpler VAT for Second‑Hand Sales and Food Donations
Proposals are emerging to simplify VAT treatment for second-hand goods sales and food donations. The changes aim to reduce complexity for businesses involved in resale of used items — potentially expanding or clarifying the margin scheme — and to ease VAT obligations on food donated to charities or food banks, removing barriers that currently discourage surplus food redistribution. These reforms target both administrative simplification and social policy goals, making it easier for retailers and hospitality businesses to donate unsold food without incurring adverse VAT consequences. Stakeholders in retail, hospitality, and the charitable sector would be directly affected.
UK: VAT Changes under HMRC’s 2026 Transformation Roadmap
An analysis of VAT changes outlined in HMRC's 2026 Transformation Roadmap for the United Kingdom. The article examines planned reforms to UK VAT administration, potentially including Making Tax Digital developments, digital reporting enhancements, and broader modernization of VAT compliance processes. It assesses how HMRC's strategic roadmap will affect businesses operating in the UK, covering anticipated changes to filing obligations, real-time data requirements, and the overall digitization of VAT compliance infrastructure as HMRC pursues greater efficiency and reduced tax gaps.
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