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Law360 Quotes Patricia Lewis and Peter Barnes on U.S. Safe Harbor Proposal

December 6, 2019, Law360

An unexpected proposal from the U.S. to frame the OECD’s tentative digital-economy-related changes to the international corporate tax system as an optional safe harbor raised questions among experts as to whether such an approach would be appropriate or feasible.

. . .

“Normally, you would think of a safe harbor as something that would be mechanical and largely equivalent of the thing it’s replacing,” said Patricia Lewis, a Senior Counsel at Caplin & Drysdale, who has written extensively about safe harbors. “It’s not entirely clear that’s what Pillar 1 is; it’s arguably a new and complex system.”

. . .

“I think Pillar 1 could work as a safe harbor, but not on the timetable that the OECD is facing,” said Peter Barnes, a tax professor at Duke University School of Law (and Of Counsel also at Caplin & Drysdale). “It will take literally years for countries to agree on the appropriate margins for the market jurisdictions to receive. There is a wide gap between the honestly held beliefs of some key market countries and the United States.”

For the full article, please visit Law360’s website (subscription required).


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