Latest news with #IIR
Zawya
a day ago
- Business
- Zawya
Nigeria's Dangote refinery expected to undertake 40-day maintenance at gasoline unit in December, IIR says
Nigeria's Dangote oil refinery is expected to carry out a 40-day planned maintenance at its gasoline-making unit in December, instead of in October as previously planned, industry monitor IIR said. The Dangote refinery did not immediately respond to a request for comment. The 650,000 barrel-per-day refinery will carry out catalyst replacement and reactor repairs in December's maintenance round, expected to start on December 4, IIR said. Dangote restarted its gasoline-making residue fluidised catalytic cracking unit on July 12, IIR added. (Reporting by Enes Tunagur; Editing by Jan Harvey)
Kuwait Times
15-07-2025
- Business
- Kuwait Times
The engine of fairness: How Pillar Two ensures a global minimum tax
KUWAIT: Kuwait's recent enactment of Law 157/2024, alongside its executive regulations, has set the stage for a new era of corporate taxation. This legislation, which implements the BEPS Pillar Two initiative and the GloBE Model Rules, is built upon a fundamental principle: ensuring that large multinational enterprises (MNEs) pay a minimum 15 percent effective tax rate on their profits, wherever they operate. But how exactly is this minimum tax collected? The GloBE Rules employ a sophisticated, interconnected system of 'Charging Mechanisms' to ensure that any shortfall below the 15 percent minimum is captured. These are primarily the Income Inclusion Rule (IIR), the Undertaxed Profits Rule (UTPR), and a critical addition for countries like Kuwait: the Qualified Domestic Minimum Top-up Tax (QDMTT). Understanding how these rules interact is key to appreciating the global reach and local benefits of Pillar Two. The primary mechanism: The Income Inclusion Rule (IIR) At the heart of the GloBE Rules lies the Income Inclusion Rule (IIR). This is considered the primary enforcement mechanism for the global minimum tax. Imagine an MNE group as a large family business with its head office, the 'Ultimate Parent Entity' or UPE, in one country and numerous branches, ie subsidiaries or 'Constituent Entities', scattered across the globe. The IIR works on a 'top-down' approach: If a subsidiary of this MNE group is located in a country where its effective tax rate (ETR) on its GloBE Income falls below the 15 percent minimum, the IIR allows the parent company, which is typically the Ultimate Parent Entity or an Intermediate Parent Entity, to apply a 'top-up tax.' This means the parent company in its home country will be liable to pay the difference needed to bring that subsidiary's effective tax rate up to 15 percent. For example, if a Kuwaiti MNE group has a subsidiary in a country where the local tax rate results in an ETR of only 10 percent, the IIR would mean that the Kuwaiti parent company would need to pay an additional 5 percent top-up tax on that subsidiary's income, of course adjusted for specific GloBE rules, including the Substance-Based Income Exclusion. The beauty of the IIR is its efficiency and directness. It encourages countries where parent companies are located to implement Pillar Two, as it grants them the first right to collect any top-up tax that arises from their low-taxed subsidiaries worldwide. This ensures that profits are taxed fairly at the group level. The backstop: The Undertaxed Profits Rule (UTPR) While the IIR is the primary rule, the system needs a safety net. This is where the Undertaxed Profits Rule (UTPR) comes into play. The UTPR acts as a 'backstop' mechanism, designed to collect any remaining top-up tax that was not fully captured under the IIR. Why would the IIR not capture everything? This could happen if, for instance, the Ultimate Parent Entity (UPE) of an MNE group is located in a country that has not implemented a Qualified IIR, or the UPE is in a low-tax jurisdiction itself, meaning there is no higher-tier entity to apply the IIR. In such scenarios, the UTPR allows other countries where the MNE group operates, and that have implemented the UTPR, to collect the top-up tax. How does it do this? The UTPR typically operates by denying deductions for expenses or making equivalent adjustments to the taxable income of Constituent Entities within their jurisdiction. This effectively increases the tax liability of the MNE's entities in that country, ensuring that the undertaxed profits are subjected to the minimum 15 percent rate. The amount of top-up tax allocated under the UTPR to a particular country is typically based on a formula, often linked to the MNE's tangible assets and number of employees in that jurisdiction. This ties the tax collection to the real economic substance present in the country. The UTPR ensures that even if the IIR is not fully effective, the undertaxed profits of large MNEs will not entirely escape the global minimum tax. Kuwait's strategic advantage: The Qualified Domestic Minimum Top-up Tax (QDMTT) op-up Tax (QDMTT) Now, let's turn to a critical component that empowers Kuwait to directly benefit from Pillar Two — the Qualified Domestic Minimum Top-up Tax (QDMTT). This rule is a powerful tool that gives countries like Kuwait the first right to tax any shortfall in their own jurisdiction. Let's think of it this way: When an MNE's entities in Kuwait have an effective tax rate below 15 percent, a top-up tax arises. Without a QDMTT, this top-up tax would generally be collected by a foreign parent company under the IIR or by other foreign entities under the UTPR. This would mean Kuwait effectively loses out on potential tax revenue generated by economic activity within its own borders. By implementing a QDMTT, as Kuwait has done with law 157/2024, our nation ensures that: •Any top-up tax calculated on the low-taxed profits of MNE entities within Kuwait is paid directly to the Kuwaiti tax authorities. •This payment extinguishes, or reduces, the liability for that same top-up tax under the IIR or UTPR in other countries. In essence, the QDMTT takes precedence. This is a strategic move that secures Kuwait's share of the global minimum tax. It prevents revenue from flowing out to other jurisdictions that might otherwise collect the top-up tax. It reinforces Kuwait's fiscal sovereignty and contributes directly to the national budget, funding public services and development projects right here at home. The interplay: How IIR, UTPR and QDMTT Work Together The rules are designed to work in a specific order to avoid double taxation and ensure the top-up tax is collected efficiently: first: If a country, like Kuwait, has implemented a QDMTT, this rule is applied first. Any top-up tax due on the profits of MNE entities in Kuwait, because their ETR is below 15 percent, is collected by Kuwait. This prioritizes the taxing rights of the jurisdiction where the low-taxed profits arise. second (top-down): If, after the application of any QDMTT, there is still a top-up tax amount outstanding for a low-taxed entity, e.g., if the host country did not have a QDMTT, or if the QDMTT did not fully cover the top-up amount due to slight rule differences, the IIR comes into play. The parent entity higher up in the ownership chain, if it is located in an IIR-implementing jurisdiction, will be liable to pay the remaining top-up tax. This process continues down the ownership chain until the top-up tax is fully covered. Last (Backstop): Only if the IIR has not fully captured all the outstanding top-up tax, for instance, if no IIR-implementing jurisdiction is found in the ownership chain for a particular low-taxed entity, does the UTPR act as the final backstop. The remaining top-up tax is then allocated among UTPR-implementing jurisdictions based on a formula involving employees and tangible assets, and collected through mechanisms like denial of deductions. This hierarchy ensures that the top-up tax is collected once and by the appropriate jurisdiction, prioritizing the country where the actual economic activity generating the undertaxed profits occurs. Why Kuwait's approach is prudent Kuwait's decision to enact a QDMTT reflects a comprehensive understanding of the Pillar Two mechanics. It is not merely about complying with global standards, but about optimizing national revenue collection in a new global tax environment. By ensuring that any top-up tax generated in Kuwait is paid to Kuwait, the government safeguards its tax base and maximizes the benefits from this international tax reform. For multinational companies operating in Kuwait, this means a clear understanding of these mechanisms is paramount. Compliance will require detailed calculations of GloBE Income and Adjusted Covered Taxes on a jurisdictional basis, and a precise application of these charging rules. GloBE Income or Loss and Adjusted Covered Taxes are the subject matter of our coming articles, so stay tuned! Hence, the IIR, UTPR and especially Kuwait's QDMTT form a robust system designed to enforce the global minimum tax. These mechanisms ensure that large MNEs contribute their fair share, ultimately fostering a more equitable global economy and securing vital resources for national development in countries like Kuwait. NOTE: Hassan M Abdulrahim is a Senior Instructor (Business) at Canadian College Kuwait and CEO & Co-founder of Visionary Consulting Company
Time of India
02-07-2025
- Politics
- Time of India
2020 US election: FBI blocked probe into 'Chinese meddling', documents show - who was being shielded?
The Federal Bureau of Investigation (FBI) blocked probe into the allegations of Chinese Communist Party meddling into the 2020 US presidential elections to benefit Joe Biden , aiming to shield then-FBI Director Christopher Wray as it would "contradict" his congressional testimony, Fox News Digital reported citing newly declassified FBI documents. The documents, containing exchanges between FBI officials prior to the 2020 election, were recently declassified by FBI director Kash Patel and sent to senate judiciary committee chair Chuck Grassley of Iowa. What do the documents reveal? According to the report, Chinese government created 'a large amount' of fake US driver's licenses, generated using data from millions of TikTok users, 'tens of thousands of Chinese students and immigrants sympathetic to the Chinese Communist Party to vote for US Presidential Candidate Joe Biden, despite not being eligible to vote in the United States,' the New York Post reported. Moreover, the FBI's Albany field office reported the plot from a credible source, but FBI headquarters "suppressed" the report, partly because it would "contradict" director Wray's congressional testimony claiming no coordinated national voter fraud. Internal communications showed Albany staff protested the suppression, warning that political motives were influencing intelligence handling and that the suppression prevented other agencies from vetting the information. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo Recall of probe report 'abnormal' Details of the alleged meddling were shared in an FBI Intelligence Information Report (IIR) on September 25, 2020, just a day after Wray told Congress the bureau had no knowledge of any 'coordinated national voter fraud effort'. The report, however, was withdrawn within minutes of being released. Calling the move "abnormal", FBI assistant director Marshall Yates, in a letter to Chuck Grassley earlier this year said, 'Based on conversations with key individuals involved, it was conveyed that the recall of the IIR was abnormal.' Yates had said that the probe report had "prompted significant attention throughout FBI Headquarters" and "the recall was issued to 'reinterview' the source." "The rationale provided to Albany staff for the recall was that Headquarters deemed the report not 'authoritative,' but this characterization was met with disagreement by those in the Albany office. Internal emails reflect that Albany staff had concerns that suppressing the IIR would be 'dangerous if we cite potential political implications as reasons for not putting out our information,' emphasizing that it was not the role of analysts to align intelligence with public testimony," he wrote in the letter.
New York Post
02-07-2025
- Politics
- New York Post
FBI blocked probe into alleged 2020 election plot by China because it would ‘contradict Director Wray's testimony' to Congress, docs show
The FBI blocked an investigation into an alleged Chinese effort to meddle in the 2020 election to help former President Joe Biden because it would have made then-Director Christopher Wray look bad, documents released by the bureau show. The documents, provided to Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) by the FBI and released on Tuesday, detailed the alleged election interference plot which was obtained by the bureau's Albany field office in August of 2020 from a credible confidential source and was subsequently 'suppressed' by FBI headquarters. The source relayed that the Chinese government had produced 'a large amount' of fraudulent US driver's licenses – using data collected from millions of TikTok accounts – that would allow 'tens of thousands of Chinese students and immigrants sympathetic to the Chinese Communist Party to vote for US Presidential Candidate Joe Biden, despite not being eligible to vote in the United States.' 4 The suppressed report detailed an alleged Chinese plot to cast fraudulently obtained mail-in ballots in support of Joe Biden. EPA Information about the alleged plot was circulated in a Sept. 25, 2020, FBI Intelligence Information Report (IIR) – one day after Wray testified to Congress that the bureau was unaware of any 'coordinated national voter fraud effort' – and recalled minutes after it was issued. 'Based on conversations with key individuals involved, it was conveyed that the recall of the IIR was abnormal,' FBI Assistant Director Marshall Yates wrote in a June 27 letter to Grassley. Yates noted that the IIR was recalled at the direction of FBI headquarters after it prompted 'significant attention' within the bureau – and even though it was 'coordinated and disseminated in textbook fashion.' The recall was purportedly issued so the Albany field office could 're-interview' the source, but even after the source was 'reengaged and provided additional context to support' the existence of an election interference plot, 'FBI Headquarters maintained its position not to republish the report,' Yates wrote. 'One reason cited for not releasing the IIR was because 'the reporting will contradict Director Wray's testimony,'' the assistant director informed Grassley. 4 Wray had testified to Congress a day before the Albany field office report was circulated, indicating he was unaware of any massive voter fraud threat ahead of the 2020 presidential election. EPA Albany field officer staffers were told that the recall was issued because the report was deemed by FBI headquarters to be 'not authoritative' – a characterization that was 'met with disagreement by those in the Albany office,' Yates noted. The assistant director further revealed that internal emails within the Albany field office showed staff 'had concerns that suppressing the IIR would be 'dangerous if we cite potential political implications as reasons for not putting out our information,' emphasizing that it was not the role of analysts to align intelligence with public testimony.' Staffers also expressed concern with FBI headquarters under Wray 'assuming the role of sole gatekeeper' for the intelligence community, since suppressing the report would prevent intelligence agencies from corroborating or discrediting the source's information. The Albany field office's report also resulted in a new policy being implemented ahead of the 2020 election, which stated that 'all raw reporting concerning the election will now require HQ coordination, which was not required,' Yates said. 4 Grassley said the documents released by the FBI 'smack of political decision-making.' AP 4 The FBI's China task force appears to have never looked into the alleged election interference plot, since the report was suppressed, according Grassley. REUTERS Grassley argued that the documents 'smack of political decision-making and prove the Wray-led FBI to be a deeply broken institution.' 'Ahead of a high-stakes election happening amid an unprecedented global pandemic, the FBI turned its back on its national security mission,' the senator said in a statement. 'One way or the other, intelligence must be fully investigated to determine whether it's true, or if it's just smoke and mirrors.' 'Chris Wray's FBI wasn't looking out for the American people – it was looking to save its own image.' In his sworn testimony before the Senate Homeland Security and Government Affairs Committee on Sept. 24, 2020, Wray told lawmakers that the bureau has 'not seen historically any kind of coordinated national voter fraud effort in a major election, whether it is by mail or otherwise… [B]ut people should make no mistake we are vigilant as to the threat and watching it carefully, because we are in uncharted new territory.' Last week, the FBI confirmed that it 'found no information' that the bureau's Foreign Influence Task Force (FITF)-China division ever 'aggressively investigated' the alleged election interference plot, according to Grassley. Current FBI Director Kash Patel, who authorized the release of the documents to Grassley's office, has vowed to bring more transparency to the bureau since assuming the helm. 'Now's the time to rebuild the FBI's trust,' Grassley said in a statement. 'Director Patel's willingness to work with me to establish renewed transparency and accountability is a critical part of that process, and I applaud him for his efforts.'
Kuwait Times
01-07-2025
- Business
- Kuwait Times
Kuwait takes bold step towards fairer global taxation
Monday June 30, 2025 marked a significant milestone for Kuwait's financial landscape with the Ministry of Finance publishing the executive regulations for Law 157/2024. This legislation is a pivotal move, ushering in the implementation of the OECD's Base Erosion and Profit Shifting (BEPS) Pillar Two initiative and the Global Anti-Base Erosion (GloBE) Model Rules. While these terms might sound complex, their essence is straightforward: to ensure that large multinational companies (MNEs) pay a fair share of tax wherever they operate, including right here in Kuwait. For years, the global tax system allowed multinational corporations to minimize their tax bills by shifting profits to countries with very low or no corporate taxes. This created an uneven playing field, making it harder for countries to fund public services and putting local businesses at a disadvantage. Pillar Two, developed by the OECD and agreed upon by over 160 countries, aims to change this. What is Pillar Two, and who does it affect? At its heart, Pillar Two introduces a global minimum corporate tax rate of 15%. This means that if an MNE operates in a country where its effective tax rate (the actual tax paid on its profits) falls below 15%, that company might have to pay, in its jurisdiction, an additional 'top-up tax' to bring its effective rate up to the minimum. Crucially, this new rule is not for every business. It specifically targets large multinational enterprises. In Kuwait, as per Law 157/2024, the rules apply to MNEs with annual consolidated revenues of EUR 750 million or more (approximately KD 250 million) in at least two of the four preceding financial years. This threshold ensures that the focus remains on the biggest global players, leaving smaller local businesses unaffected. Certain entities, such as government bodies, non-profit organizations, and international organizations, are generally excluded from these rules. The pillars of implementation: How the top-up tax is collected To achieve this 15 percent minimum tax, Pillar Two utilizes two main interlocking mechanisms: Inclusion Rule (IIR): This is the primary mechanism. It essentially allows a parent company, usually the ultimate parent entity (UPE) of an MNE group, to impose a top-up tax on its low-taxed subsidiary located in another country. Think of it as the head office ensuring its branches around the world pay their fair share. Profits Rule (UTPR): This acts as a backstop. If the IIR is not applied (for example, if the parent company's country has not implemented the IIR), the UTPR allows other countries where the MNE operates to deny deductions or impose an equivalent charge, effectively collecting the top-up tax that would otherwise have gone uncollected. In addition to these international rules, many countries, including Kuwait, are also implementing a Qualified Domestic Minimum Top-up Tax (QDMTT). This allows Kuwait to collect any top-up tax due on the profits of MNE entities located within its borders, ensuring that the revenue stays in Kuwait rather than being collected by another jurisdiction under the IIR or UTPR. Understanding the key numbers: GloBE income, covered taxes and effective tax rate To figure out if an MNE owes top-up tax, we need to understand a few key concepts: •GloBE Income or Loss: This is the starting point for calculating the MNE's profits in a particular country for Pillar Two purposes. It begins with the financial accounting net income or loss (FANIL) of the MNE's entities in that jurisdiction, and then undergoes specific adjustments outlined in the GloBE rules. These adjustments ensure a consistent and standardized measure of profit across different countries, regardless of their local accounting rules. •Adjusted Covered Taxes: This refers to the taxes actually paid by an MNE in a particular country that are relevant for Pillar Two. It starts with the current and deferred tax expense as reported in the MNE's financial statements, and then specific adjustments are made. These adjustments are crucial to ensure that only the taxes directly related to the GloBE income are considered and that any temporary differences in tax recognition are properly accounted for. •Effective Tax Rate (ETR): This is the most crucial calculation. For each country where an MNE operates, the ETR is determined by dividing the total Adjusted Covered Taxes by the total GloBE Income for that jurisdiction. If this calculated ETR falls below the 15 percent minimum rate, then a top-up tax will be due. Calculating the top-up tax: Bridging the gap Once the ETR for a jurisdiction is found to be below 15 percent, the 'top-up tax percentage' is calculated as the difference between the 15 percent minimum rate and the actual ETR. This percentage is then applied to the MNE's 'excess profits' in that jurisdiction. The GloBE rules also include a Substance-Based Income Exclusion (SBIE), which reduces the amount of profit subject to the top-up tax based on the MNE's tangible assets and payroll costs in that jurisdiction. This is designed to reward real economic activity and discourage purely artificial profit shifting. The final top-up tax amount is then determined, with any QDMTT collected by Kuwait reducing the amount that would otherwise be due under the IIR or UTPR. What this means for Kuwait The implementation of Pillar Two through Law 157/2024 and its executive regulations signifies Kuwait's commitment to international tax cooperation and fairness. For multinational enterprises operating in Kuwait, this means: •Increased compliance: MNEs will need to gather and analyze significant amounts of financial data on a jurisdictional basis to comply with the new rules. This will require robust data management systems and close collaboration between tax, finance, and accounting departments. •Potential for Higher Tax Bills: Companies that have historically paid very low effective tax rates in Kuwait or other jurisdictions may see an increase in their overall tax burden. •Leveling the Playing Field: For local Kuwaiti businesses and smaller enterprises not subject to Pillar Two, this initiative helps to create a fairer competitive environment by ensuring large MNEs contribute their share. •Enhanced Revenue for Kuwait: More importantly, by implementing a QDMTT, Kuwait ensures that any top-up tax generated from low-taxed profits within its borders is collected locally, contributing to the national economy and supporting public services. This new tax era is a complex but necessary step towards a more equitable and stable global tax system. While the intricacies of Pillar Two can be challenging, Kuwait's proactive approach in implementing these rules demonstrates its commitment to responsible global citizenship and a more prosperous future for all. Note: Hassan M Abdulrahim is a Senior Instructor (Business) at Canadian College Kuwait and CEO & Co-founder of Visionary Consulting Company
