The UTPR Disregards the Need for Nexus

November 2022
Region: Global

Squire Patton Boggs’ Jeff VanderWolk, addresses the points missed by Professor Picciotto that were made by Nathan Boidman and himself, in earlier letters on the issues raised by the UTPR (now known as the undertaxed profits rule) under international law and tax treaties.

We were simply pointing out that the UTPR could (and probably would, in practice) involve the collection of tax by a country on income from business activities and sales having no economic connection to the taxing country. It seems obvious to us that this would be a problem as a matter of principle, especially if the business activities in question were those of a resident of a treaty partner.

*This article was first published in Tax Notes International on October 31, 2022.