Withholding Taxes Feared a ‘Dealbreaker’ for Global Tax Reform

Developing countries and businesses are at loggerheads over how the global tax deal should treat withholding taxes.

Withholding taxes are levied by countries on income generated within their borders and paid to someone abroad. Most businesses want these taxes to be taken into account when calculating part of the global tax deal known as Amount A—an idea many developing countries oppose.

The treatment of withholding taxes is one of the issues that “could be considered a dealbreaker” if the taxes count against how much of multinational companies’ profits developing countries are granted the right to tax under Amount A, said ...