Tax News & Views International Weekly: Transparency, Revised

Often, the journey from enacted law to a fully implemented policy can be a long, winding one—especially if it involves new requirements for businesses or taxpayers.

This is especially true with the Corporate Transparency Act, legislation passed in 2021 which requires those who control any business entity to report its “beneficial owner”—the person who ultimately benefits from whatever income the entity should receive. Supporters said the law would block bad actors from using anonymous shell companies to carry out tax evasion or other illegal acts.

But the final rule, released by the Department of the Treasury earlier this month—more than five years after the law was enacted—will only apply to foreign-based companies. U.S. filers will no longer have to report beneficial ownership information under the law, and the department said it would delete the information that was already submitted.

Treasury said this was in keeping with the law’s mandate to balance the requirements against administrative burdens, especially for small businesses. The department also said that existing legal tools can track beneficial ownership information from U.S. sources. Transparency advocates, on the other hand, claim the decision effectively guts the law and will hinder law enforcement’s efforts to track illicit financial flows.

The final rule does leave in place a significant new reporting requirement for non-U.S. based companies, defined as “those entities that are formed under the law of a foreign country and have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office.” Treasury said it will not enforce a requirement that foreign companies report their “company applicants,” or the individuals who helped it register in the U.S. The rule contains other carveouts as well, including one which would exempt some requirements for pooled investment vehicles registered in the U.S. and controlled by a U.S. person.

The CTA, even if in a narrower form, comes into force amid an overall movement towards increasing disclosure and tax transparency. This includes not only the decade-old U.S. Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS), but also the global trend towards country-specific tax reporting requirements.

Noteworthy Items This Week

Looming Clash? OECD Scrutiny and FinCEN’s Narrowed Corporate Transparency Act – Nana Ama Sarfo, Tax Notes ($):

The development will be of interest to the OECD, which recently examined the United States and several other countries on their compliance with the OECD’s tax transparency standards. For more than a decade, the OECD has pressed the United States to improve the availability of ownership information, and the federal government has responded with a patchwork of legal and regulatory updates. The CTA represented one of the most significant additions to that framework. But the OECD, in a June 2026 report, found that legal challenges to the CTA, combined with the introduction of the interim final rule, eroded the country’s progress in implementing some of those standards.

Now that the CTA’s narrowed scope has been memorialized in FinCEN’s final rule, the question is whether the government will nonetheless be able to address some or all the beneficial ownership information reporting gaps that the OECD has identified over the years.

From ‘Fortress North America’ to All-Out Trade War: How the U.S.-Canada Talks Collapsed – Matina Stevis-Gridneff and Ana Swanson, The New York Times ($):

The sticking points were many. In the last few hours, negotiators clashed over Canadian rules promoting French-language movies and shows online, as well as the Trump administration’s demands to dictate Canada’s steel tariffs on other countries. Canada, in turn, insisted on more generous treatment for its autos, electric vehicles and products made with metal — and ultimately backed away from its offer to cooperate on the Keystone XL pipeline that President Trump has long desired, people familiar with the negotiations said.

Companies Want OECD to Clarify Character of AI Transactions – Lauren Vella, Bloomberg Tax ($):

Companies are asking the OECD to clarify how to accurately characterize AI transactions between multinational companies and their affiliates in the organization’s transfer pricing guidelines.

AI is being adopted in ways that will fundamentally change how intragroup services are performed, AstraZeneca said in commentsto the organization, which sought feedback on a proposal to update its transfer pricing guidelines on intragroup services.

The proposal includes detailed, hypothetical examples of the application of the guidelines, which cover approaches to pricing the sharing of services, including AI tools, between related companies.

International Tax Cooperation: Rethinking the Past, Reimagining the Future – Mindy Herzfeld, Tax Notes ($):

As OECD leadership repeatedly emphasizes, the need for international cooperation in tax — especially at a time of escalating trade tensions — is crucial. Striking the right balance between inclusivity and success at the OECD, while also ensuring a meaningful voice for underrepresented countries, is no small feat..

Treasury Proposes Reg on Pro Rata Share of Foreign Dividends – Michael Rapoport, Bloomberg Tax ($):

The Treasury Department and the IRS proposed regulations Tuesday for a change in the treatment of certain dividends received by US taxpayers from their foreign subsidiaries.

The planned regulations (REG-115646-25; RIN 1545-BR77) lay out parameters and definitions for the move to new ways for US shareholders to determine their pro rata share of dividends received from controlled foreign corporations — foreign corporations that are more than 50%-owned by US shareholders.

The change, which has implications for mergers and acquisitions, was made in the 2025 tax-and-spending law.

Public Domain Superhero of the Week

Every week, a new character from the Golden Age of Comics, who’s fallen out of use.

This week’s entry: Tomboy

Debut Year:1954

Debut Publication: Captain Flash #1

Origin Story: The seemingly goody two-shoes daughter of a local police detective, she secretly fights crime as the masked heroine Tomboy.

Superpowers: No superpowers, but she is a skilled fighter.

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